Massachusetts Dissolution Package to Dissolve Corporation
MASSACHUSETTS CORPORATE
DISSOLUTION
LAW SUMMARY
Statutory Reference:
Statutory References: GENERAL LAWS OF MASSACHUSETTS, Title
XXII, Chapter 155 (§§ 50, 51, 51A) and Chapter 156B (§§
100, 102, 103)
General Discussion:
The General Laws of Massachusetts have what appears to be a conflict
regarding the correct procedure for voluntarily dissolving a Massachusetts
corporation, hence, there are two statutory references listed above.
Chapter 155 (General Provisions Relative to Corporations) provides a
dissolution procedure that is not unlike the procedure set out in Chapter
156B (Certain Business Corporations). Using the Chapter 155 procedures,
the dissolution can be instituted by as few as 40% of the shareholders
and is a purely judicial action. The Chapter 156B procedures, while
ultimately requiring judicial approval, are the result of a vote of 2/3
of the shareholders (or such percentage as may be set out in the
Articles of Organization).
This summary is for a dissolution which follows the statutory
procedures set forth in Chapter 156B. The additional statutory reference
is provided if you wish to compare the two procedures.
A Massachusetts corporation may be dissolved if that dissolution is
authorized by a 2/3 vote of the shareholders, unless a greater or lesser
percentage is provided for in the Articles of Organization of the corporation.
Within thirty days from the date the dissolution is authorized, notice
of that authorization must be mailed to the Commissioner of Revenue.ÂÂ
Thereafter, Articles of Dissolution are filed with the Secretary of the
Commonwealth.
Once the corporation is "dissolved," it continues its corporate existence
for three years in order to accomplish settle and close its affairs.ÂÂ
During this period, the corporation may, in its own name, prosecute and
defend suits by or against it, dispose of and convey its property, and
make distributions to its stockholders of any assets remaining after the
payment of its debts and obligations. The corporation MAY NOT continue
to do business as the corporation did before the dissolution.
For the purposes of any suit brought by or against the corporation during
this three year period, the three years is extended for ninety days after
the last final judgment in any such litigation.
At the conclusion of the three year period (or the extension thereof),
or at any time during the three year period, the corporation may petition
the Supreme Judicial or Superior Court to distribute all or part of its
assets to the shareholders. The Court will require certified or registered
mail notice to the known creditors of the corporation as well as to the
Secretary of the Commonwealth and the Commissioner of Corporations and
Taxation. Notice will also be required to be published in a newspaper
of general circulation in the city or town where the corporation is located.ÂÂ
After a hearing, the Court may, upon determination that the interests of
the Commonwealth and the various creditors of the corporation have been
adequately protected, enter a decree permitting the distribution of the
assets to the shareholders.
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