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 Kentucky Plan of Liquidation and Dissolution of a Corporation is a legal process that outlines the steps and procedures for winding up the affairs of a corporation registered in the state of Kentucky. This plan is designed to efficiently and effectively dissolve and liquidate the corporation, ensuring that all assets are properly distributed and all debts are settled. The Kentucky Plan of Liquidation and Dissolution typically involves several key steps. First, the corporation's board of directors must adopt a resolution recommending the dissolution and liquidation of the corporation. This resolution is then presented to the shareholders for approval during a duly called and noticed shareholders' meeting. Once approved, the corporation must file articles of dissolution with the Kentucky Secretary of State, thereby initiating the legal process of dissolution. The plan may specify the appointment of a liquidating agent or committee responsible for overseeing the corporate dissolution process. This agent or committee will be responsible for collecting and liquidating the corporation's assets, settling any outstanding liabilities, and distributing any remaining proceeds to shareholders. Under the Kentucky law, there are two types of Kentucky Plans of Liquidation and Dissolution. The first type is the voluntary dissolution, which occurs when shareholders voluntarily decide to wind up the corporation's affairs. This may happen due to various reasons, such as the corporation achieving its purpose or the shareholders' decision to pursue other business opportunities. The second type is the involuntary dissolution, which can occur when the corporation's shareholders or creditors file a petition with the court, alleging that the corporation is no longer conducting its business or affairs in accordance with the law. In this case, the court will evaluate the petition and decide whether the corporation should be dissolved and liquidated. During the liquidation and dissolution process, the corporation's assets are sold or distributed, and the proceeds are used to satisfy the corporation's outstanding debts and liabilities. Any remaining proceeds are then distributed to the shareholders in accordance with their ownership interests or as specified in the plan of distribution. It is important to note that the Kentucky Plan of Liquidation and Dissolution may vary depending on the specific circumstances and requirements of the corporation. Therefore, it is advisable to consult with a qualified attorney or legal professional experienced in corporate law to ensure compliance with all applicable laws and regulations.
