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.

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Kentucky Dissolution Package to Dissolve Corporation

Kentucky Dissolution Package to Dissolve Corporation

Category:

Corporations - Dissolution

State:

Kentucky

Control #:

KY-DP-0001

Format:

Instant download

Description

The dissolution of a corporation package contains all forms to dissolve a corporation in Kentucky, step by step instructions, addresses, transmittal letters, and other information.

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

Failing to dissolve the corporation allows third parties to continue to sue the corporation as if it is still in operation. A judgment might mean that shareholders use the money received from distributed assets when the corporation closed down to satisfy judgments against the corporation.

There is no fee to file the certificate of dissolution. However, there is a non-refundable $15 special handling fee for processing documents delivered in person at the Sacramento SOS office. It can take the SOS many weeks to process a certificate. However, expedited service is available for an additional fee.

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.

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.

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.

Definition. The ending of a corporation, either voluntarily by filing a notice of dissolution with the Secretary of State or as ordered by a court after a vote of the shareholders, or involuntarily through government action as a result of failure to pay taxes.

In Kentucky, business entities are required by law to formally dissolve. In order to properly close, a domestic entity must file articles of dissolution, and a foreign entity must file a certificate of withdrawal. These forms are available for download on this website.

You must file Form 966, Corporate Dissolution or Liquidation, if you adopt a resolution or plan to dissolve the corporation or liquidate any of its stock. You must also file your corporation's final income tax return.

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Kentucky Dissolution Package to Dissolve Corporation

CORPORATE DISSOLUTION

KENTUCKY

STATUTORY REFERENCE

KENTUCKY REVISED STATUTES, Â§Â§ 271B.010 through 271B.400

A Kentucky corporation may be dissolved in three different ways: voluntarily, administratively, or judicially. This summary addresses ONLY the voluntary dissolution of a Kentucky corporation.

If a corporation that has not issued shares or has not commenced business, a majority of the incorporators or initial directors of may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth: (1) The name of the corporation;
(2) The date of its incorporation;
(3) Either: (a) That none of the corporation's shares has been issued; or
(b) That the corporation has not commenced business; (4) That no debt of the corporation remains unpaid;
(5) That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued; and
(6) That a majority of the incorporators or initial directors authorized the dissolution.

Additionally, a corporation's board of directors may propose dissolution for submission to the shareholders. For a proposal to dissolve to be adopted: (a) The board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and
(b) The shareholders entitled to vote must approve the proposal to dissolve.

The board of directors may condition its submission of the proposal for dissolution on any basis.

The corporation must notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with KRS 271B.7-050. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

Unless the articles of incorporation or the board of directors require a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a majority of all votes entitled to be cast on that proposal.

At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing an original and three (3) exact or conformed copies of articles of dissolution setting forth: (a) The name of the corporation;
(b) The date dissolution was authorized;
(c) If dissolution was approved by the shareholders: 1. The number of votes entitled to be cast on the proposal to dissolve; and
2. Either the total number of votes cast for and against dissolution or the (a) The total number of undisputed votes cast for dissolution and a statement that
(b) The number cast for dissolution was sufficient for approval; and
(d) If voting by voting groups was required, the information required must be separately provided for each voting group entitled to vote separately on the plan to dissolve.

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

A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including: (a) Collecting its assets;
(b) Disposing of its properties that will not be distributed in kind to its shareholders;
(c) Discharging or making provision for discharging its liabilities;
(d) Distributing its remaining property among its shareholders according to their interests; and
(e) Doing every other act necessary to wind up and liquidate its business and affairs.

Dissolution of a corporation does not: (a) Transfer title to the corporation's property;
(b) Prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation's share transfer records;
(c) Subject its directors or officers to standards of conduct different from those prescribed by law;
(d) Change quorum or voting requirements for its board of directors or shareholders; change provisions for selection, resignation, or removal of its directors or officers or both; or change provisions for amending its bylaws;
(e) Prevent commencement of a proceeding by or against the corporation in its corporate name;
(f) Abate or suspend a proceeding pending by or against the corporation on the
(d) effective date of dissolution;
(g) Terminate the authority of the registered agent of the corporation; or
(h) Alter the obligations and responsibilities of the corporation as prescribed by applicable federal or state law with regard to the filing or examination of all federal and state tax returns or the payment, assessment, or collection of any federal or state tax due with respect to those returns.

A dissolved corporation may dispose of the known claims against it by following the statutory procedure.Â The dissolved corporation must notify its known claimants in writing of the dissolution at any time after its effective date. The written notice must: (a) Describe information that must be included in a claim;
(b) Provide a mailing address where a claim may be sent;
(c) State the deadline, which may not be fewer than one hundred twenty (120) days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and
(d) State that the claim will be barred if not received by the deadline.

A claim against the dissolved corporation is barred: (a) If a claimant who was given written notice does not deliver the claim to the dissolved corporation by the deadline;
(b) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety (90) days from the effective date of the rejection notice.

A "claim" does not include a contingent liability, a claim based on an event occurring after the effective date of dissolution or any liability to Kentucky or to the United States for any state or federal tax liability.

A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice.Â The notice must: (a) Be published one time in a newspaper of general circulation in the county where the dissolved corporation's principal office (or, if none in this state, its registered office) is or was last located;
(b) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
(c) State that a claim against the corporation will be barred unless a proceeding to enforce the claim is commenced within two (2) years after the publication of the notice.

If the dissolved corporation publishes a newspaper notice in accordance with statutory provisions, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two (2) years after the publication date of the newspaper notice: (a) A claimant who did not receive written notice under KRS 271B.14-060;
(b) A claimant whose claim was timely sent to the dissolved corporation but not acted on; and
(c) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

A claim may be enforced against the dissolved corporation to the extent of its undistributed assets or, if the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of his pro rata share of the claim or the corporate assets distributed to him in liquidation, whichever is less.Â A shareholder's total liability for all claims under this section must not exceed the total amount of assets distributed to that shareholder.

Assets of a dissolved corporation that should be transferred to a creditor, claimant, or shareholder of the corporation who cannot be found or who is not competent to receive them must be reduced to cash and deposited with the State Treasurer or other appropriate state official for safekeeping.

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Kentucky Dissolution Package to Dissolve Corporation

CORPORATE DISSOLUTION

KENTUCKY

STATUTORY REFERENCE

KENTUCKY REVISED STATUTES, Â§Â§ 271B.010 through 271B.400

A Kentucky corporation may be dissolved in three different ways: voluntarily, administratively, or judicially. This summary addresses ONLY the voluntary dissolution of a Kentucky corporation.

The board of directors may condition its submission of the proposal for dissolution on any basis.

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

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.

Kentucky Dissolution Package to Dissolve Corporation

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