What is required for a corporate dissolution?
In California, the process of officially terminating a corporation and winding up its affairs is known as dissolution. In order to begin the dissolution process, a corporation’s board of directors must pass a resolution to dissolve the corporation. Following the resolution, directors must file the appropriate paperwork with the Secretary of State, like the articles of dissolution, the Certificate of Dissolution, and the Certificate of Secretary of State Acceptance. Most corporations must also publish a notice of dissolution in a newspaper. Other dissolution requirements depend on the corporation’s particular situation. For instance, if the corporation is publicly traded, then the board of directors must file a Form 25 with the California Department of Corporations. A corporation must also pay any outstanding taxes and fees, file tax returns for the years the corporation was operating, notify creditors about the dissolution and pay any debts, cancel business licenses and permits, and report to other state agencies, if applicable. Generally, the only way to officially dissolve a corporation is to go through all of these procedures. Lastly, once the dissolution process is complete, the corporation’s board of directors must distribute any remaining assets to the shareholders and file the Final Return with the Secretary of State. The Final Return is a form that states that all of the steps of the dissolution process have been completed. After this, the corporation is officially dissolved, and can’t conduct any business.
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