Arkansas Plan of Liquidation and Dissolution of a Corporation

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Multi-State
Control #:
US-0076BG
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Word; 
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Description

Dissolution is the act of bringing to an end. It is the act of rendering a legal proceeding null, or changing its character. Under corporate law, it is the last stage of liquidation. Dissolution is the process by which a company is brought to an end.



Liquidation is the selling of the assets of a business, paying bills and dividing the remainder among shareholders, partners or other investors. A business need not be insolvent to liquidate. Upon liquidation of certain business, such as a bank, a bond may be required to be posted to assure the proper distribution of assets to creditors.

How to fill out Plan Of Liquidation And Dissolution Of A Corporation?

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FAQ

A plan of dissolution is a written description of how an entity intends to dissolve, or officially and formally close the business. A plan of dissolution will include a description of how any remaining assets and liabilities will be distributed.

The corporation's bylaws or the LLC operating agreement typically outline the dissolution process and needed approvals. To comply with corporation formalities, the board of directors should draft and approve the resolution to dissolve. Shareholders then vote on the director-approved resolution.

To dissolve a corporation, California's default rules call for written consent by shareholders holding at least 50% of the voting power?the same minimum requirement if there was a vote at a meeting. However, the corporation's articles can require a higher voting percentage.

A judge will issue a judicial resolution instructing the company to be dissolved. Any fees and taxes owed will be collected by the government and assets liquidated. All debts owed to creditors will be paid. Any remaining funds are then paid out to shareholders.

Hire a professional auctioneer and hold a public auction. Pay a business broker a fee to sell off your assets. File bankruptcy, in which case the bankruptcy trustee will sell your assets and pay off your creditors with the proceeds. Assign your assets and debts to a company that specializes in liquidating businesses.

?A corporation must file Form 966 if its adopts a resolution or plan to dissolve the corporation or liquidate any of its stock.

The first is voluntary dissolution, which is an elective decision to dissolve the entity. A second is involuntary dissolution, which occurs upon the happening of statute-specific events such as a failure to pay taxes. Last, a corporation may be dissolved judicially, either by shareholder or creditor lawsuit.

6 Steps to Dissolve a Corporation #1 ? Seek Approval from the Board of Directors and Shareholders. First, hold a meeting with the board of directors. ... #2 ? File Articles of Dissolution. ... #3 ? Finalize Taxes. ... #4 ? Notify Creditors. ... #5 ? Liquidate and Distribute Assets. ... #6 ? Wrap Up Operations.

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Arkansas Plan of Liquidation and Dissolution of a Corporation