How Do I Dissolve a Corporation When the Sole Director Has Died?
Full Question:
Answer:
Dissolution is the termination of a corporation, either voluntarily by resolution, paying debts, distributing assets and filing dissolution documents with the Secretary of State; or by state suspension for not paying corporate taxes or some other action of the government. The primary steps involved when dissolving a company include corporate action to approve the dissolution; filing articles of dissolution with the state; filing all necessary federal, state, and local tax forms; statutory notification to creditors; settling creditors' claims and distribution of remaining business assets.
You will likely need to petition the superior court of the proper county for an order declaring the corporation duly wound up and dissolved. The petition must be filed in the name of the corporation.
Please see the CA statutes below to determine applicability:
§ 1907 Corp.
(a) The board, in lieu of filing the certificate of dissolution,
may petition the superior court of the proper county for an order
declaring the corporation duly wound up and dissolved. Such petition
shall be filed in the name of the corporation.
(b) Upon the filing of the petition, the court shall make an order
requiring all persons interested to show cause why an order should
not be made declaring the corporation duly wound up and dissolved and
shall direct that the order be served by notice to all creditors,
claimants and shareholders in the same manner as the notice given
under subdivision (b) of Section 1807.
(c) Any person claiming to be interested as shareholder, creditor
or otherwise may appear in the proceeding at any time before the
expiration of 30 days from the completion of publication of the order
to show cause and contest the petition, and upon failure to appear
such person's claim shall be barred.
(d) Thereafter an order shall be entered and filed and have the
effect as prescribed in Sections 1808 and 1809.
§ 1903 Corp.
(a) Voluntary proceedings for winding up the corporation commence
upon the adoption of the resolution of shareholders or directors
of the corporation electing to wind up and dissolve, or upon the filing
with the corporation of a written consent of shareholders thereto.
(b) When a voluntary proceeding for winding up has commenced, the
board shall continue to act as a board and shall have full powers to
wind up and settle its affairs, both before and after the filing
of the certificate of dissolution.
(c) When a voluntary proceeding for winding up has commenced, the
corporation shall cease to carry on business except to the extent
necessary for the beneficial winding up thereof and except during
such period as the board may deem necessary to preserve the
corporation's goodwill or going-concern value pending a sale of its
business or assets, or both, in whole or in part. The board shall
cause written notice of the commencement of the proceeding for
voluntary winding up to be given by mail to all shareholders (except
no notice need be given to the shareholders who voted in favor
of winding up and dissolving the corporation) and to all known creditors
and claimants whose addresses appear on the records of the
corporation.
§ 1905 Corp.
(a) When a corporation has been completely wound up without court
proceedings therefor, a majority of the directors then in office shall
sign and verify a certificate of dissolution stating:
(1) That the corporation has been completely wound up.
(2) That its known debts and liabilities have been actually paid,
or adequately provided for, or paid or adequately provided for as far as its
assets permitted, or that it has incurred no known debts or liabilities,
as the case may be. If there are known debts or liabilities for payment
of which adequate provision has been made, the certificate shall state
what provision has been made, setting forth the name and address of the
corporation, person or governmental agency that has assumed or guaranteed
the payment, or the name and address of the depositary with which deposit
has been made or any other information that may be necessary to enable
the creditor or other person to whom payment is to be made to appear and
claim payment of the debt or liability.
(3) That its known assets have been distributed to the persons entitled
thereto or that it acquired no known assets, as the case may be.
(4) That the corporation is dissolved.
(5) If no certificate of election is to be filed pursuant to
subdivision (c) of Section 1901, that the election to dissolve was made
by the vote of all the outstanding shares.
(6) That a final franchise tax return, as described by Section 2332
of the Revenue and Taxation Code, has been or will be filed with the
Franchise Tax Board, as required under Part 10.2 (commencing with
Section 18401) of Division 2 of the Revenue and Taxation Code.
(b) The certificate of dissolution shall be filed with the Secretary
of State and thereupon the corporate powers, rights, and privileges of the
corporation shall cease. The Secretary of State shall notify the
Franchise Tax Board of the dissolution.
§ 1905.1 Corp.
If a corporation has filed a certificate of dissolution with the
Secretary of State on or after January 1, 1992, and before the effective
date of the act adding this section, pursuant to Section 1905, prior to
its amendment by the act adding this section, and the Franchise Tax Board
has not, as of that effective date, made the determination required by
subdivision (c) of Section 1905, prior to its amendment by the act adding
this section, then the corporation shall be dissolved as of the date
of filing the certificate of dissolution and thereupon its corporate
existence shall cease.
§ 1906 Corp.
Except as otherwise provided by law, if the term of existence for
which any corporation was organized expires without renewal
or extension thereof, the board shall terminate its business and wind up
its affairs; and when the business and affairs of the corporation
have been wound up a majority of the directors shall execute and file
a certificate conforming to the requirements of Section 1905.
§ 2001 Corp.
The powers and duties of the directors (or other persons appointed
by the court pursuant to Section 1805) and officers after
commencement of a dissolution proceeding include, but are not limited
to, the following acts in the name and on behalf of the corporation:
(a) To elect officers and to employ agents and attorneys to
liquidate or wind up its affairs.
(b) To continue the conduct of the business insofar as necessary
for the disposal or winding up thereof.
(c) To carry out contracts and collect, pay, compromise and settle
debts and claims for or against the corporation.
(d) To defend suits brought against the corporation.
(e) To sue, in the name of the corporation, for all sums due
or owing to the corporation or to recover any of its property.
(f) To collect any amounts remaining unpaid on subscriptions to
shares or to recover unlawful distributions.
(g) To sell at public or private sale, exchange, convey
or otherwise dispose of all or any part of the assets of the corporation
for cash in an amount deemed reasonable by the board without
compliance with the provisions of Section 1001 (except
subdivision (d) thereof), or (subject to compliance with the provisions
of Sections 1001, 1200 and 1201, but Chapter 13 (commencing with
Section 1300) shall not be applicable thereto) upon such other terms and
conditions and for such other considerations as the board deems
reasonable or expedient; and to execute bills of sale and deeds
of conveyance in the name of the corporation.
(h) In general, to make contracts and to do any and all things in
the name of the corporation which may be proper or convenient for the
purposes of winding up, settling and liquidating the affairs of the
corporation.
§ 2004 Corp.
After determining that all the known debts and liabilities of a
corporation in the process of winding up have been paid or adequately
provided for, the board shall distribute all the remaining corporate
assets among the shareholders according to their respective rights
and preferences or, if there are no shareholders, to the persons
entitled thereto. If the winding up is by court proceeding
or subject to court supervision, the distribution shall not be made
until after the expiration of any period for the presentation
of claims which has been prescribed by order of the court.
§ 2010 Corp.
(a) A corporation which is dissolved nevertheless continues to exist
for the purpose of winding up its affairs, prosecuting and defending
actions by or against it and enabling it to collect and discharge
obligations, dispose of and convey its property and collect and divide
its assets, but not for the purpose of continuing business except so far
as necessary for the winding up thereof.
(b) No action or proceeding to which a corporation is a party abates by
the dissolution of the corporation or by reason of proceedings for
winding up and dissolution thereof.
(c) Any assets inadvertently or otherwise omitted from the winding up
continue in the dissolved corporation for the benefit of the persons
entitled thereto upon dissolution of the corporation and on realization
shall be distributed accordingly.
