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".

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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

Definition and meaning

The North Carolina Dissolution Package to Dissolve Corporation is a comprehensive set of legal forms designed to facilitate the process of dissolving a corporation in the state of North Carolina. This package includes all necessary documents, clearly outlining the steps required to officially close a business entity.

Step-by-step instructions

To successfully dissolve a corporation in North Carolina, follow these steps:

Prepare the Filing Cover Sheet: This is the first document you'll need to submit. Ensure it is completed accurately.
Complete Articles of Dissolution: Depending on whether shares have been issued, fill out the appropriate version of the Articles of Dissolution.
Notify Shareholders: If applicable, inform all shareholders about the proposal to dissolve the corporation.
Submit Required Documents: Mail the Cover Sheet, Articles of Dissolution, and the filing fee to the Secretary of State’s office.

Each step must be completed carefully to avoid delays or potential rejections of your application.

Who should use this form

This form is intended for business owners in North Carolina who have decided to dissolve their corporation. It is suitable for corporations that have either issued shares or have not, ensuring compliance with state laws for each specific scenario.

Legal use and context

The dissolution of a corporation in North Carolina involves legal obligations and procedural steps to ensure proper handling of the corporation's affairs, including notification to creditors and handling any outstanding liabilities. Understanding this context can help business owners navigate the complexities of corporate dissolution law.

Common mistakes to avoid when using this form

It’s vital to avoid several pitfalls when using the North Carolina Dissolution Package:

Failing to notify all shareholders prior to the vote on dissolution.
Not completing all forms legibly and accurately.
Missing deadlines for submitting claims from known claimants.
Not considering the implications of unresolved liabilities before filing for dissolution.

By being aware of these mistakes, users can ensure a smoother dissolution process.

State-specific requirements

In North Carolina, specific requirements linked to corporate dissolution include filing the correct forms with the Secretary of State, notifying all directors and shareholders, and adhering to deadlines for claims against the corporation post-dissolution. Ensure compliance with the North Carolina General Statutes related to corporation 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

Definition and meaning

Step-by-step instructions

Who should use this form

Legal use and context

Common mistakes to avoid when using this form

State-specific requirements

Related forms

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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