Question

Mac and Jennifer are Mac’s Melons and Juices only shareholders, directors, and officers. After five years of poor citrus crops, they decide to cease business. Can they simply dissolve their corporation at will? If so, what are the steps in the process?

Answer 1

Corporation can be dissolved at will as in this case, due to poor citrus crops business is at loss therefore its two partners Mac and Jennifer who are also the shareholders, directors and officers of the corporation has a right to dissolve Mac's Melons and juices at will. Following steps must be fulfilled for dissolution of business :

a. Owner of the corporation must agree to dissolve it, in this case its shareholders that is Mac and Jennifer must agree to dissolve it.

b. Once the approval from shareholder is received Certificate of dissolution with the state in which business runs must be filled along with the necessary paperwork which are settling creditors claims, tax clearance certificate etc.

c. In this step, shareholders must fill the federal, state or local tax forms even though business is dissolving tax obligations enforced by the state must be fulfilled.

d. As the corporation or business is ending it is necessary to inform it to all the creditors of the firm, it can be done through mail in which informing them regarding dissolution, mailing address to settle the claims along with deadlines must be provided.

e. If the corporation receives any pending claims from its creditors must be settled or inform creditors why their claims are rejected within set deadline.

f. The asset of the corporation must be shared among the shareholders as per their share in the corporation to avoid further complications.