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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Nebraska Dissolution Package to Dissolve Corporation

Nebraska Dissolution Package to Dissolve Corporation

Category:

Corporations - Dissolution

State:

Nebraska

Control #:

NE-DP-0001

Format:

Instant download

Definition and Meaning

A Nebraska Dissolution Package to Dissolve Corporation refers to the set of legal documents required for voluntarily dissolving a corporation registered in Nebraska. This package facilitates the official cessation of corporate existence, ensuring all necessary steps are taken to wind down operations in compliance with state law.

Legal Use and Context

The dissolution process in Nebraska, governed by the Nebraska Business Corporation Act, is initiated when a corporation chooses to cease operations. This occurs through voluntary dissolution, which is undertaken by the corporation's board of directors and approved by its shareholders. Proper execution of this package is vital to legally terminate corporate status and mitigate future liabilities.

Step-by-Step Instructions

Follow these steps to properly complete the Nebraska Dissolution Package:

Verify Eligibility: Ensure the corporation has not issued shares or commenced business operations, or if it has, confirm the proper procedures have been followed.
Prepare Articles of Dissolution: Complete the required Articles of Dissolution form, specifying the corporation's name, formation date, and confirmation of outstanding debts.
Sign and Submit: Ensure the form is signed and submit it, along with any required fees, to the Nebraska Secretary of State.
Notify Shareholders: If applicable, provide written notice to shareholders of the proposed dissolution and call a special meeting for voting.
Final Notices: After dissolution, send out notices to all known claimants, and if necessary, publish a notice to unknown claimants.

Common Mistakes to Avoid When Using This Form

When using the Nebraska Dissolution Package, it's important to avoid the following common errors:

Failing to notify all shareholders or skipping the voting process on the dissolution.
Omitting details in the Articles of Dissolution, such as the date dissolution was authorized.
Neglecting to pay the required filing fees or submitting incomplete forms.
Not following up on notification to claimants, leading to potential future liabilities.

What Documents You May Need Alongside This One

In addition to the Nebraska Dissolution Package, you may need the following documents:

Resolution of Directors: A document stating the board's agreement to dissolve the corporation.
Notice of Special Meeting: A notice sent to shareholders about the meeting to discuss and vote on dissolution.
Records of Shareholder Vote: Documentation of the outcome of the shareholders' vote, whether conducted in person or via written consent.

Key Components of the Form

Key components of the Nebraska Dissolution Package include:

Corporation Name: The official name of the corporation to be dissolved.
Date of Incorporation: The date when the corporation was originally formed.
Status of Shares: Declaration of whether shares have been issued or business has commenced.
Debt Status: Confirmation that no outstanding debts exist.
Authorization for Dissolution: Signature from a majority of incorporators or directors authorizing the dissolution.

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FAQ

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.

Hold a Directors meeting and record a resolution to Dissolve the Nebraska Corporation. Hold a Shareholder meeting to approve Dissolution of the Nebraska Corporation. File all required Biennial Reports with the Nebraska Secretary of State.

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.

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.

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.

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.

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.

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.

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.

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Nebraska Dissolution Package to Dissolve Corporation

NEBRASKA CORPORATE DISSOLUTION
LAW SUMMARY

STATUTORY REFERENCE
NEBRASKA STATUTES, Â§Â§ 21-20,151 through 21-20,157

There are three ways to dissolve a business corporation in the State of Nebraska: administratively, judicially, and voluntarily. This summary addresses only voluntary dissolution.

A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve a 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 that none of the corporation's shares has been issued or 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. A corporation's board of directors may propose dissolution for submission to the shareholders. For a proposal to dissolve to be adopted: 1. 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
2. The shareholders entitled to vote must approve the proposal to dissolve. The board of directors may condition its submission of the proposal to dissolve on any basis.

The corporation must notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with Â§ 21-2055. 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 requires a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a two-thirds majority of all the votes entitled to be cast on the proposal to dissolve.

At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth: 1. The name of the corporation;
2. The date dissolution was authorized;
3. If dissolution was approved by the shareholders, then the number of votes entitled to be cast on the proposal to dissolve; and either the total number of votes cast for and against dissolution or the total number of undisputed votes cast for dissolution and a statement that the number cast for dissolution was sufficient for approval; and
4. If voting by voting groups was required, the information about the number of votes cast for the proposal to dissolve must be separately provided for each voting group entitled to vote separately on the proposal 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: 1. Collecting its assets;
2. Disposing of its properties that will not be distributed in kind to its shareholders;
3. Discharging or making provision for discharging its liabilities;
4. Distributing its remaining property among its shareholders according to their interests; and
5. Doing every other act necessary to wind up and liquidate its business and affairs. Dissolution of a corporation does not: 1. Transfer title to the corporation's property;
2. Prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation's share transfer records;
3. Subject its directors or officers to standards of conduct different from those prescribed in Â§Â§ 21-2078 to 21-20,115;
4. 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;
5. Prevent commencement of a proceeding by or against the corporation in its corporate name;
6. Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or
7. Terminate the authority of the registered agent of the corporation. A dissolved corporation may dispose of the known claims against it by following the statutory procedures.

The dissolved corporation can notify its known claimants in writing of the dissolution at any time after its effective date. The written notice must: 1. Describe the information that must be included in a claim;
2. Provide a mailing address where a claim may be sent;
3. State the deadline, which may not be fewer than one hundred twenty days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and
4. State that the claim will be barred if not received by the deadline. A claim against the dissolved corporation is be barred: 1. If a claimant who was given the statutory written notice does not deliver the claim to the dissolved corporation by the deadline; or
2. If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety days from the effective date of the rejection notice. A claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

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. The published notice must: 1. 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;
2. Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
3. State that a claim 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 dissolved corporation publishes the statutory newspaper notice, 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 five years after the publication date of the newspaper notice: 1. A claimant who did not receive written notice under section 21-20,156;
2. A claimant whose claim was timely sent to the dissolved corporation but not acted on; and
3. A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution. A claim against a dissolved corporation may be enforced: 1. Against the corporation to the extent of its undistributed assets; or
2. If the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of his or her pro rata share of the claim or the corporate assets distributed to him or her in liquidation, whichever is less, but a shareholder's total liability for all claims under this section may not exceed the total amount of assets distributed to him or her. 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.

Nebraska Dissolution Package to Dissolve Corporation

NEBRASKA CORPORATE DISSOLUTION
LAW SUMMARY

STATUTORY REFERENCE
NEBRASKA STATUTES, Â§Â§ 21-20,151 through 21-20,157

There are three ways to dissolve a business corporation in the State of Nebraska: administratively, judicially, and voluntarily. This summary addresses only voluntary dissolution.

Nebraska Dissolution Package to Dissolve Corporation

Definition and Meaning

Legal Use and Context

Step-by-Step Instructions

Common Mistakes to Avoid When Using This Form

What Documents You May Need Alongside This One

Key Components of the Form

Related forms

Viewed forms

Form popularity

FAQ

Do I still owe money to a dissolved company?

How do I dissolve a corporation in Nebraska?

Can a dissolved company still operate?

What happens to assets when a corporation is dissolved?

Can the government dissolve a corporation?

Can I use a bank account after dissolving a corporation?

How do I dissolve an inactive corporation?

What happens when a corporation is dissolved?

What happens if you do not dissolve a corporation?

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