Involuntary dissolution is when a company is ordered to dissolve or when the court forces the sale of a company. Dissolve your business correctly to remain in good standing with the state. Company Formation and Filing Considerations, Article 9 Filing, Searching and Due Diligence, Independent Director and Manager Services, UCC, IP and Related Due Diligence Services, The fact that the entity was not properly dissolved or withdrawn may turn up during the due diligence process for bank loans or contracts. Section 104.17 - Involuntary Dissolution of Corporation, 950 - Casetext Also ensure you remit any annual renewal invoices to maintain your registered agent. Involuntary dissolution of a corporation that is ordered by the secretary of state if the corporation has failed to comply with certain procedures required by law. Some states, such as Georgia, even have a time limit for reinstatements. The city of Los Angeles, for example, requires filing a statement of abandonment of use of fictitious business form. Theres a better way to access your retirement funds to start or buy a business without triggering penalties. Ideally, you should meet with the team as soon as possible. Not only does reinstating a business allow the company to open its doors for business again, but it also puts it back in good standing. Step #2 Drafting the Plan of Dissolution. (a) A verified complaint for involuntary dissolution of a corporation on any one or more of the grounds specified in subdivision (b) may be filed in the superior court of the proper county by any of the following persons: (1) One-half or more of the directors in office. It is important to file Articles of Dissolution in order to terminate your corporations requirement of paying annual fees to the Secretary of State. Sec. The good news is a business that is involuntarily dissolved may file for reinstatement. The state where the corporation is formed can revoke or inactivate a corporation instead of ordering dissolution. Digital resources across a variety of topics to support and enhance ENROLLED States may not allow dissolution if the action is unfair to minority shareholders. Involuntary or administrative dissolution of an entity can also occur for a variety of reasons, among the most common being the failure to file an annual report or properly maintain a registered agent for service of process. Section 241 of theBCAprovides that the Director may by order cancel a certificate of incorporation and the corporation is dissolved on the date fixed in the order, for default in compliance with notice that: Corporations cancelled pursuant to section 241(4) of the Business Corporations Act for any of the reasons listed above may be revived, on the application of any interested person (for example, an officer, director, shareholder, creditor, or estate trustee of a shareholder) if not more than twenty years from the date of dissolution.
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