Delaware Plan of Complete Liquidation and Dissolution, often referred to as the Delaware dissolution plan, is a legal process followed by corporations wishing to wind up their operations and cease their existence as legal entities. Under Delaware law, one of the most popular jurisdictions for incorporating businesses, corporations must adopt a dissolution plan and obtain shareholder approval before commencing the liquidation process. The Delaware plan of complete liquidation and dissolution involves a series of steps aimed at settling the corporation's affairs, liquidating its assets, and distributing the remaining proceeds to its shareholders. This process is designed to ensure fairness and transparency for all parties involved, including shareholders, creditors, and other stakeholders. The plan typically begins with the appointment of a trustee or liquidating agent, who oversees the liquidation process and ensures compliance with legal requirements. The trustee is responsible for selling the corporation's assets, paying off debts and liabilities, collecting outstanding receivables, and resolving any legal disputes or claims against the company. In terms of distribution, the Delaware dissolution plan provides instructions on how the remaining proceeds should be divided among shareholders. This distribution can be based on various factors, such as the ownership percentage of each shareholder or specific preferences outlined in the plan. While the Delaware plan of complete liquidation and dissolution follows a general framework, there can be different types or variations depending on the corporation's specific circumstances. One such variant is the Delaware short-form dissolution, which allows corporations with minimal assets, liabilities, and creditors to expedite the liquidation process by bypassing certain formalities. Another type is the Delaware voluntary dissolution, which occurs when shareholders willingly decide to terminate the corporation, often due to financial difficulties, a change in business strategy, or the achievement of its objectives. In contrast, involuntary dissolution can take place when a court orders the termination of a corporation due to legal non-compliance, insolvency, or other specific reasons. In conclusion, the Delaware Plan of Complete Liquidation and Dissolution is a comprehensive process for winding up a corporation's affairs, liquidating its assets, and distributing proceeds to shareholders. This well-defined process promotes transparency, fairness, and legal compliance throughout the liquidation process. Different types of Delaware dissolution plans, such as the short-form dissolution, voluntary dissolution, and involuntary dissolution, may be suitable depending on a corporation's unique circumstances.
Delaware Plan of complete liquidation and dissolution
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To dissolve your domestic corporation in Delaware, you must provide the completed Certificate of Dissolution form to the Department of State by mail, fax or in person, along with the filing fee.
In Delaware, "dissolution" refers to the process of closing a corporation through the filing of a Certificate of Dissolution. Closing an LLC, on the other hand, requires "canceling" through a Certificate of Cancellation.
Plan of Complete Liquidation and Dissolution (DE Corporation; Default Procedure) A plan of complete liquidation and dissolution for a Delaware corporation voluntarily dissolving and winding up under the default procedure under DGCL § 281(b) (also known as short-form dissolution).
What are the differences between liquidation and dissolution? Dissolving a company through the process of dissolution often takes place when a company is solvent, but is no longer trading. Liquidation however, occurs due to a company having financial difficulties and therefore being unable to keep up with their debts.
A plan of dissolution is a written description of how an entity intends to dissolve, or officially and formally close the business. A plan of dissolution will include a description of how any remaining assets and liabilities will be distributed.
The fee to file the Certificate is $204.00. If your document is more than 1 page, please include $9.00 for each additional page. You will receive a stamped ?Filed? copy of your submitted document.
It is advisable to formally cancel a Delaware LLC if the company has ever been used in any capacity. The LLC will continue to accrue Delaware franchise tax year after year if the company is not properly canceled. The public cancellation filing stops the LLC from accruing future franchise tax, penalties, and interest.
You'll need to complete and mail the appropriate dissolution form and a cover memo, along with the filing fee, to the Delaware DOS. You can find the dissolution forms and the cover memo on the dissolutions and cancellations section of the Division of Corporations website.
