What happens to assets when a corporation is dissolved?

After a company is dissolved, it must liquidate its assets. Liquidation refers to the process of sale or auction of the company's non-cash assets.Assets used as security for loans must be given to the bank or creditor that extended the loan, or you must pay off the loan before selling such assets.

How do I dissolve my LLC in NC?

North Carolina requires business owners to submit their Articles of Dissolution by mail or online. Online filers must select "Submit a Filing to an Existing Entity" search for their business, and then select "Upload a PDF Filing".

US Legal Forms
North Carolina Dissolution Package to Dissolve Corporation

North Carolina Dissolution Package to Dissolve Corporation

Category:

Corporations - Dissolution

State:

North Carolina

Control #:

NC-DP-0001

Format:

Instant download

About this form

The North Carolina Dissolution Package is a comprehensive set of legal documents designed to facilitate the dissolution of a corporation in North Carolina. This package includes all necessary forms along with step-by-step instructions, transmittal letters, and essential information relevant to the dissolution process. Unlike other business forms, this package is specifically tailored for corporate dissolution and takes into account the unique legal requirements in North Carolina.

Form components explained

Cover Sheet: Required for filing any documents with the Secretary of State.
Articles of Dissolution: Necessary to officially dissolve the corporation, with provisions for corporations that have or have not issued shares.
Notice of Special Meeting: Informs shareholders of a meeting to vote on the dissolution.
Resolution of Board: Documents the board's recommendation for dissolution.
Notice to Claimants: Communicates the dissolution to known claimants.
Notice to Unknown Claimants: Publishes a legal notice to alert unknown claimants of the dissolution.

State law considerations

This dissolution package reflects the legal procedures outlined by the North Carolina General Statutes, specifically sections 55-14-01 through 55-14-08. It ensures compliance with state laws governing corporate dissolution and the subsequent handling of claims against the corporation.

Situations where this form applies

This form package is necessary when the owners of a corporation in North Carolina decide to voluntarily dissolve the business. Situations may include ceasing operations, merging with another company, or when shareholders agree that continuing the corporation is no longer feasible. It ensures that the dissolution is conducted legally and thoroughly, safeguarding all parties involved.

Who can use this document

This package is intended for:

Corporation directors wishing to formally dissolve the business.
Shareholders looking to initiate the dissolution process.
Incorporators of a corporation that has not issued shares and needs to dissolve.
Legal representatives assisting clients with corporate matters.

Completing this form step by step

Step 1: Complete the Cover Sheet accurately and include it with your filing.
Step 2: Fill out the Articles of Dissolution, ensuring to provide the corporation's name, details of the officers and directors, and the date of the corporation's formation.
Step 3: Notify shareholders of the special meeting to discuss the proposed dissolution.
Step 4: Obtain approval from the board of directors and shareholders through a resolution or written consent.
Step 5: Notify known claimants about the dissolution and publish notice to unknown claimants as required by law.
Step 6: Submit all required documents and the associated filing fee to the Secretary of State.

Notarization requirements for this form

Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.

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Plan of Liquidation

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Plan of complete liquidation and dissolution

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Proposal to adopt plan of dissolution and liquidation

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Common mistakes

Failing to notify all shareholders before the dissolution vote.
Not completing the Cover Sheet or Articles of Dissolution correctly.
Overlooking the requirement to notify known claimants of the dissolution.
Not adhering to the appropriate filing fee or submission guidelines.

Advantages of online completion

Convenient access to all necessary forms in one package.
Editable templates ensure accuracy and personalization.
Reliable guidance from experienced legal professionals.
Instant download capability for immediate use.

Legal use & context

The dissolution process must follow statutory requirements to be legally effective.
Failure to properly dissolve a corporation may lead to continued liability for directors and shareholders.
The package facilitates compliance with North Carolina laws governing business corporations.

Summary of main points

The North Carolina Dissolution Package provides essential forms and instructions for corporate dissolution.
Proper execution of the dissolution process is crucial to avoid future liabilities.
All involved parties must be notified to ensure a legal and transparent dissolution.

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FAQ

In legal terms, when a company is dissolved, it ceases to exist. It cannot still be trading - although a person may trade (misleadingly) using its name.

When a corporation is dissolved, it no longer legally exists and, in most cases, its debts disappear as well. State laws usually give additional time beyond the dissolution for creditors to file suits for failure to pay any corporate debts or for the wrongful distribution of corporate assets.

If the company has ceased trading and is closed owing money and your debt is with that company then your liability ends with that company.

After a company is dissolved, it must liquidate its assets. Liquidation refers to the process of sale or auction of the company's non-cash assets.Assets used as security for loans must be given to the bank or creditor that extended the loan, or you must pay off the loan before selling such assets.

Dissolve the Legal Entity (LLC or Corporation) with the State. An LLC or Corporation needs to be officially dissolved. Pay Any Outstanding Bills. You need to satisfy any company debts before closing the business. Cancel Any Business Licenses or Permits. File Your Final Federal and State Tax Returns.

North Carolina requires business owners to submit their Articles of Dissolution by mail or online. Online filers must select "Submit a Filing to an Existing Entity" search for their business, and then select "Upload a PDF Filing".

If you want to close a North Carolina business, you do so by voluntarily filing Articles of Dissolution for the entity type (Business Corporation, Nonprofit Corporation, Limited Liability Company (LLC)).

Hold a Board of Directors meeting and record a resolution to Dissolve the North Carolina Corporation. Hold a Shareholder meeting to approve Dissolution of the North Carolina Corporation. File all required Annual Reports with the North Carolina Secretary of State. Clear up any business debts.

After dissolution, you cannot use the funds remaining in your business bank account for new business. LLC members no longer have the authority to conduct business or do anything that would indicate that the LLC is still active. Your bank account can cover only essential winding up affairs.

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North Carolina Dissolution Package to Dissolve Corporation

NORTH CAROLINA CORPORATE DISSOLUTION

Statutory Reference:

NORTH CAROLINA GENERAL STATUTES, Â§Â§55-14-01 through 55-14-08

General Discussion:

There are two ways to voluntarily dissolve a business corporation in the State of North Carolina: 1) by the directors or, if the corporation has no directors, by a majority of the incorporators if the corporation has not issued any shares, or 2) by board of directors and shareholders.

If the corporation has not issued shares, the directors or, if the corporation has no directors, a majority of the incorporators may dissolve the corporation by filing articles of dissolution with the Secretary of State.

If the corporation has issued shares, then the corporation may be dissolved if the board of directors recommends dissolution to the shareholders and the shareholders approve the recommendation of dissolution. If the Board determines that special circumstances exist, or that there is some conflict with the board making a recommendation of dissolution, then the board may make no recommendation to the shareholders and advise the shareholders of why it is failing to make a recommendation.Â The board of directors may condition the submission of its proposal for dissolution on any basis.

The shareholders entitled to vote on whether or not the corporation should be dissolved must approve the board's recommendation.Â Prior to a vote on any recommendation of the board, all shareholders must be notified of the proposed shareholders meeting to address the issue of dissolution.Â Unless the certificate of incorporation or the board of directors requires a greater vote, the proposal to dissolve must be approved by a majority of all the votes entitled to be cast on that proposal.Â If the board's recommendation is approved by the shareholders, then articles of dissolution are filed with the Secretary of Sate.

A corporation is dissolved upon the effective date of its articles of dissolution.

However, as important as following the correct procedures for "dissolving" the corporation are the actions which must be taken by the "dissolved" corporation after dissolution to accomplish the "winding up" of the corporation's affairs.

A dissolved corporation continues its corporate existence, but it but may not carry on any business except that appropriate to wind up and liquidate its business and affairs.Â As part of the "winding up," the corporation may collect its assets, dispose of property that will not be distributed to shareholders, satisfy or make provision to satisfy its liabilities, and distribute any assets remaining after creditors have been satisfied to its shareholders.Â Generally speaking, the "dissolved" corporation can do anything necessary to wind up and liquidate its business affairs.

Dissolution of a corporation does not transfer title to the corporation's property, does not prevent the transfer of corporate shares, does not subject the directors and officers to a different standard of care than before the dissolution, does not change any voting requirements, does not prevent transfer of the corporation's stock, does not stop any one from suing the corporation, does not stop any pending legal action, does not terminate the authority or obligations of the corporation's registered agent, and does not automatically render the shareholders liable for the debts of the corporation.

A dissolved corporation may dispose of the known claims against it by following these statutory requirements:

The corporation must notify its known claimants in writing of the dissolution after the effective date of dissolution.Â This written notice must describe the information that must be included in a claim, must provide a mailing address where a claim may be sent, must state the deadline by which the corporation must receive the claim, and must state that the claim will be barred if not received by the deadline, which must be at least 120 days from the date of the notice.

A claim against the corporation is barred if a claimant who was given written notice does not deliver the claim to the corporation by the deadline OR if a claimant whose claim was rejected by the corporation by written notice of rejection does not sue to enforce the claim within 90 days from the date of the rejection notice.Â Note:Â a "claim" does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

A corporation may satisfy and dispose of the unknown claims against it by following the procedure:

The corporation may publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice. The notice must be published one time in a newspaper of general circulation in the county where the corporation's principal office is/was located or, if the corporation had no office in North Carolina, then in a newspaper of general circulation in the county where the corporations registered office is/was located.Â The notice must describe the information that must be included in a claim and provide a mailing address where the claim may be sent.Â The notice must also state that claims against the corporation will be barred unless a proceeding to enforce the claim is commenced within five years after the publication of the notice.

If the corporation publishes a newspaper notice, claims against the corporation are barred unless the claimant commences a proceeding to enforce the claim against the corporation within five years after the publication date of the newspaper notice.

Any entity having a claim against the corporation may enforce its claim against undistributed assets of the corporation, or if the assets have been distributed to shareholders, then against the shareholders. Claims against a shareholder of the corporation are limited to the shareholder's pro rata share of the claim or to the corporate assets distributed to the shareholder, whichever is less.Â A shareholder's total liability for all claims cannot exceed the total amount of assets distributed to the shareholder.

Note: All Information and Previews are subject to the Disclaimer located on the main forms page, and also linked at the bottom of all search results.

North Carolina Dissolution Package to Dissolve Corporation

NORTH CAROLINA CORPORATE DISSOLUTION

Statutory Reference:

NORTH CAROLINA GENERAL STATUTES, Â§Â§55-14-01 through 55-14-08

General Discussion:

A corporation is dissolved upon the effective date of its articles of dissolution.

A dissolved corporation may dispose of the known claims against it by following these statutory requirements:

A corporation may satisfy and dispose of the unknown claims against it by following the procedure:

Note: All Information and Previews are subject to the Disclaimer located on the main forms page, and also linked at the bottom of all search results.

North Carolina Dissolution Package to Dissolve Corporation

About this form

Form components explained

State law considerations

Situations where this form applies

Who can use this document

Completing this form step by step

Notarization requirements for this form

Related forms

Common mistakes

Advantages of online completion

Legal use & context

Summary of main points

Viewed forms

Form popularity

FAQ

Can a dissolved company still operate?

What happens when a corporation is dissolved?

Do I still owe money to a dissolved company?

What happens to assets when a corporation is dissolved?

How do I dissolve an inactive corporation?

How do I dissolve my LLC in NC?

How do I dissolve a corporation in NC?

How do I close a corporation in North Carolina?

Can I use a bank account after dissolving a corporation?

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