Dissolution is the act of bringing to an end. It is the act of rendering a legal proceeding null, or changing its character. Under corporate law, it is the last stage of liquidation. Dissolution is the process by which a company is brought to an end.
Liquidation is the selling of the assets of a business, paying bills and dividing the remainder among shareholders, partners or other investors. A business need not be insolvent to liquidate. Upon liquidation of certain business, such as a bank, a bond may be required to be posted to assure the proper distribution of assets to creditors.
The Hawaii Plan of Liquidation and Dissolution of a Corporation is a comprehensive legal process that outlines the steps and procedures for winding up and terminating the operations of a corporation registered in Hawaii. This plan is specifically relevant for corporations seeking to dissolve and distribute their assets in accordance with Hawaii state laws. Under the Hawaii Plan of Liquidation and Dissolution, several key steps and considerations must be addressed. First, the corporation's board of directors or majority shareholders must adopt a resolution stating the intent to dissolve the corporation. This resolution should be recorded in the corporate records. Once the intent to dissolve is established, the corporation must notify all known creditors, both secured and unsecured. This notification should outline the corporation's intent to dissolve and provide relevant contact information for creditors to submit any claims against the corporation. Simultaneously, the corporation must also settle any outstanding liabilities, debts, and legal obligations. This may involve a thorough review of the corporation's books and records to ensure all debts are paid, taxes and licenses are in order, and any pending legal matters are addressed appropriately. Following the resolution of debts and obligations, the corporation must then distribute its remaining assets to its shareholders. Depending on the specific circumstances, these assets may be distributed in cash, property, or other forms of consideration as determined by the corporation's governing documents or by agreement among the shareholders. It is important to note that there are different types of Hawaii Plans of Liquidation and Dissolution, depending on the corporation's specific circumstances. Some common types include voluntary liquidation and dissolution, involuntary liquidation and dissolution (in situations where the corporation fails to meet legal requirements), and administrative dissolution by the state. Each type follows a specific set of procedures, as defined by Hawaii state laws and regulations. In conclusion, the Hawaii Plan of Liquidation and Dissolution of a Corporation is a legal framework that provides guidance for corporations registered in Hawaii to wind up their operations, settle debts, and distribute remaining assets to shareholders. It ensures a systematic and orderly process for terminating the corporation's existence in compliance with applicable laws.
