This is a process undergone by a business corporation that wishes to be dissolved and which voluntarily ceases to exist. To dissolve a corporation, it can done in two ways as follows:
- A declaration of dissolution is filed if the corporation is not subject to liquidation.
- File a notice of liquidation and closure of liquidation assuming the corporation is to be liquidated.
Before these documents are filled, Business Corporation should still be registered. Also an initial declaration and all yearly updating declarations are filed. The fees and charges payable under the Act covering the legal publicity of enterprises are paid.
Declaration of Dissolution
Corporations under the Business Corporations Act can only be dissolved by its shareholders, by its directors or by a declaration of dissolution filed by its sole shareholder.
Dissolution by Shareholders
Only the two thirds of the votes casted for the dissolution by the shareholders can only make it possible for a corporation to be dissolved. Sometimes a majority of over ½ is needed. Minutes from the meeting are also recorded, which includes the action plan for dissolution, to be stored in the corporate book. The corporation must attach the certified copy of the special resolution of the shareholders with the declaration.
Dissolution by Board of Directors
The board of directors can dissolve a corporation if it has no properties, obligations or shareholders. A director is designated from the board of directors to sign the declaration of dissolution. A certified copy of the resolution of the board of directors is attached with the declaration.
Declaration of Dissolution by Sole Shareholder
A sole shareholder of a corporation may request the dissolution of a corporation. A declaration of dissolution is filed by the shareholder indicating that the corporation’s rights and obligations become those of its sole shareholder and that the sole shareholder is able to pay the liabilities of the corporation as they become due