A Delaware Plan of Liquidation refers to a comprehensive strategy devised by a company incorporated in the state of Delaware to wind up its affairs and dissolve its existence. This plan outlines the manner in which the company's assets will be distributed among its shareholders and creditors, as well as the steps to be taken to terminate its legal existence. As one of the most popular jurisdictions for incorporation in the United States, Delaware has specific laws and regulations governing the dissolution process, making it an attractive option for companies seeking to initiate a liquidation. The Delaware Plan of Liquidation is designed to provide a clear roadmap for the company's management and stakeholders during the dissolution process and ensure a smooth and orderly winding up of the company's affairs. The Delaware Plan of Liquidation typically includes several key components. Firstly, it outlines the reasons for the company's dissolution, such as reaching the end of its intended lifespan, significant financial losses, or any other compelling circumstances. Secondly, it defines the authority and responsibilities of the appointed liquidation agent or committee, who will oversee the distribution of assets and ensure compliance with applicable laws and regulations. Moreover, the plan specifies the steps required to determine and satisfy the company's outstanding debts and obligations. This may involve selling company assets, paying off creditors, and settling pending legal disputes. It also addresses any potential claims against the company, providing a mechanism for resolving such claims and preventing future liabilities. Furthermore, the Delaware Plan of Liquidation outlines the process of distributing the remaining assets among the company's shareholders. This may involve the distribution of cash, securities, or other assets in proportion to each shareholder's ownership interests. The plan also specifies any additional considerations or provisions related to the distribution, such as tax implications or special treatment for certain classes of shareholders. It is worth noting that there are different types of Delaware Plans of Liquidation, tailored to the specific needs and circumstances of the company seeking dissolution. Some common variations include: 1. Voluntary Liquidation: This is the most common type, where the company's shareholders vote to voluntarily wind up and dissolve the business. 2. Involuntary Liquidation: In certain situations, creditors or other interested parties may initiate a liquidation process against the company, forcing it to dissolve and distribute its assets. 3. Fast-Track Liquidation: This type of liquidation is often chosen when the company has minimal assets or liabilities, allowing for a quicker and simpler dissolution process. 4. Creditors' Liquidation: This type of liquidation is initiated when the company is unable to pay its debts, and the creditors take control of the liquidation process to maximize their recovery. In conclusion, a Delaware Plan of Liquidation is a detailed strategy outlining the process for dissolving a company and distributing its assets in compliance with the applicable laws and regulations. It provides a framework for smoothly winding up the company's affairs, addressing any outstanding debts, and distributing the remaining assets to the shareholders. By utilizing Delaware's favorable corporate laws, companies can ensure an efficient and legally compliant dissolution process.
Delaware Plan of Liquidation
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To dissolve your domestic corporation in Delaware, you must provide the completed Certificate of Dissolution form to the Department of State by mail, fax or in person, along with the filing fee.
The fee to file the Certificate is $204.00. If your document is more than 1 page, please include $9.00 for each additional page. You will receive a stamped ?Filed? copy of your submitted document.
Plan of Complete Liquidation and Dissolution (DE Corporation; Default Procedure) A plan of complete liquidation and dissolution for a Delaware corporation voluntarily dissolving and winding up under the default procedure under DGCL § 281(b) (also known as short-form dissolution).
Liquidation Plan means with respect to any Company or any Fund, a plan of liquidation, a plan to dispose of a substantial portion of its assets out of the ordinary course of business (except in connection with a Permitted Merger) or any other plan of action with similar effect.
Take a Member Vote. If the LLC Operating Agreement does not specify guidelines for canceling the LLC, the Delaware LLC Act states that the LLC may be canceled after affirmative or written consent of members who own more than two-thirds of the current percentage ownership.
You'll need to complete and mail the appropriate dissolution form and a cover memo, along with the filing fee, to the Delaware DOS. You can find the dissolution forms and the cover memo on the dissolutions and cancellations section of the Division of Corporations website.
It is advisable to formally cancel a Delaware LLC if the company has ever been used in any capacity. The LLC will continue to accrue Delaware franchise tax year after year if the company is not properly canceled. The public cancellation filing stops the LLC from accruing future franchise tax, penalties, and interest.