Connecticut Dissolution Package to Dissolve Corporation
CONNECTICUT CORPORATE
DISSOLUTION
LAW SUMMARY
Statutory Reference:
CONNECTICUT STATUTES, §§ 33-880 through 33-903
General Discussion:
There are two ways to dissolve a business corporation in the State of
Connecticut: 1) by the incorporators or the initial directors if the corporation
has not issued any shares or has not commenced business or 2) by board
of directors and shareholders.
If the corporation that has not issued shares or has not commenced business,
a majority of the incorporators or initial directors of the corporation
may dissolve the corporation by filing a certificate of dissolution with
the Secretary of State.
If the corporation has issued shares or commenced business, then the
corporation may be dissolved if the board of directors recommends dissolution
to the shareholders and the shareholders approve the dissolution. If the
Board determines that special circumstances exist, or that there is some
conflict with the board making a recommendation of dissolution, then the
board will make no recommendation to the shareholders and advise the shareholders
of why it is failing to make a recommendation. The board of directors
may condition its submission of its proposal for dissolution on any basis.
The shareholders entitled to vote on whether or not the corporation
should be dissolved must be approved by the shareholders. Prior to
a vote on any recommendation of the board, all shareholders must be notified
of the proposed shareholders meeting to address the issue of dissolution.ÂÂ
Unless the certificate of incorporation or the board of directors requires
a greater vote or a vote by voting groups, the proposal to dissolve to
be adopted must be approved by a majority of all the votes entitled to
be cast on that proposal. If the board's recommendation is approved
by the shareholders, then a certificate of dissolution is filed with the
Secretary of Sate.
A corporation is dissolved upon the effective date of its certificate
of dissolution.
However, as important as following the correct procedures for "dissolving"
the corporation are the actions which must be taken, the "winding up" of
the corporate affairs, by the "dissolved" corporation after dissolution.
A dissolved corporation continues its corporate existence, but it but
may not carry on any business except that appropriate to wind up and liquidate
its business and affairs. As part of the "winding up," the corporation
may collect its assets, dispose of property that will not be distributed
to shareholders, satisfy or make provision to satisfy its liabilities,
and distribute any assets remaining after creditors have been satisfied
to its shareholders. Generally speaking, the "dissolved" corporation
can do anything necessary to wind up and liquidate its business affairs.
Dissolution of a corporation does not transfer title to the corporation's
property, does not prevent the transfer of corporate shares, does not subject
the directors and officers to a different standard of care than before
the dissolution, does not change any voting requirements, does not prevent
transfer of the corporation's stock, does not stop any one from suing the
corporation, does not stop any pending legal action, does not terminate
the authority or obligations of the corporation's registered agent, and
does not automatically render the shareholders liable for the debts of
the corporation.
Prior to the final act of dissolution, which is the distribution to
the shareholders of assets left after the settlement of corporate obligations
and debts, the corporation MUST obtain a current statements from the Connecticut
Commissioner of Revenue Services and the Administrator of the unemployment
compensation law showing either that the corporation has paid all its taxes
and contributions or that it was not liable for any taxes or contributions,
or that it has made adequate provisions, with such surety as shall be satisfactory
to the Commissioner and/or the Administrator for the future payment of
any unpaid taxes.
When the corporation is dissolved, it must satisfy all known claims
against it and all unknown claims against it.
A corporation may satisfy and dispose of the known claims against it
by following the procedure:
The corporation must notify its known claimants in writing of the dissolution
after the effective date of dissolution. This written notice must
describe the information that must be included in a claim, must provide
a mailing address where a claim may be sent, must state the deadline by
which the corporation must receive the claim (this cannot be less than
120 days from the date of the written notice), and must state thatÂÂ
the claim will be barred if not received by the deadline.
A claim against the corporation is barred if a claimant who was given
written notice under does not deliver the claim to the corporation by the
deadline OR if a claimant whose claim was rejected by the corporation does
not sue to enforce the claim within 90 days from the date of the rejection
notice. Note: a "claim" does not include a contingent liability
or a claim based on an event occurring after the effective date of dissolution.
A corporation may satisfy and dispose of the unknown claims against
it by following the procedure:
The corporation may publish notice of its dissolution and request that
persons with claims against the corporation present them in accordance
with the notice. The notice must be published one time in a newspaper of
general circulation in the county where the corporation's principal office
is/was located or, if the corporation had no office in Connecticut, then
in a newspaper of general circulation in the county where the corporations
registered office is/was located. The notice must describe the information
that must be included in a claim and provide a mailing address where the
claim may be sent. The notice must also state that claims against
the corporation will be barred unless a proceeding to enforce the claim
is commenced within three years after the publication of the notice.
If the corporation publishes a newspaper notice, claims against the
corporation are unless the claimant commences a proceeding to enforce the
claim against the corporation within three years after the publication
date of the newspaper notice.
Any entity having a claim against the corporation may enforce its claim
against undistributed assets of the corporation, or if the assets have
been distributed to shareholders, then against the shareholders. Claims
against a shareholder of the corporation are limited to the shareholder's
pro rata share of the claim or to the corporate assets distributed to the
shareholder, whichever is less. A shareholder's total liability for
all claims cannot exceed the total amount of assets distributed to the
shareholder.
CONNECTICUT STATUTES, § 33-903 PROVIDES "Assets of a dissolved
corporation that should be transferred to a creditor, claimant or shareholder
of the corporation who cannot be found or who is not competent to receive
them shall be reduced to cash and deposited for safekeeping with
the State Treasurer or other state official authorized to hold such assets.
When the creditor, claimant or shareholder furnishes satisfactory proof
of entitlement to the amount deposited, the State Treasurer or such other
state official shall pay him or his representative that amount."
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