Virginia Dissolution Package to Dissolve Corporation
DISSOLUTION OF A STOCK CORPORATION
VIRGINIA
STATUTORY REFERENCES
CODE OF VIRGINIA, §§ 13.1-742 through 13.1-755
A Virginia Stock Corporation may be terminated or dissolved
either voluntarily or involuntarily. THIS SUMMARY PACKAGE ADDRESSES
ONLY VOLUNTARY DISSOLUTION.
If a corporation has not issued shares or has not commenced
business, a majority of the initial directors, or, if initial directors
were not named in the articles of incorporation and have not been elected,
then the incorporators of a corporation may dissolve the corporation and
terminate its corporate existence by filing with the Commission articles
of termination of corporate existence. Those articles must provide:
2. Either (i)
that none of the corporation's shares have been issued or (ii) that the
corporation has not commenced business;
4. That the
net assets of the corporation remaining after winding up have been distributed
to the shareholders, if shares were issued; and
5. That a majority
of the initial directors authorized the dissolution or that initial directors
were not named in the articles of incorporation and have not been elected
and a majority of the incorporators authorized the dissolution.
If a corporation has issued shares or has commenced
business, then the corporation's board of directors may propose dissolution
for submission to the shareholders. For a proposal to dissolve to
be adopted:
1. The board
of directors must recommend dissolution to the shareholders unless the
board of directors determines that because of conflict of interests or
other special circumstances it should make no recommendation and communicates
the basis for its determination to the shareholders; and
2. The shareholders
entitled to vote must approve the proposal to dissolve as provided in subsection
E of this section.
The board of directors may condition its submission
of the proposal for dissolution on any basis.
The corporation must notify each shareholder,
whether or not entitled to vote, of the proposed shareholders' meeting
in accordance with § 13.1-658. The notice must state that the purpose,
or one of the purposes, of the meeting is to consider dissolving the corporation.
Unless the board of directors, acting pursuant to statute, requires
a greater vote, dissolution must be approved by the holders of more
than two-thirds of all votes entitled to be cast on the proposal to dissolve.
The articles of incorporation may provide for a greater or lesser vote
than that provided for in this subsection or a vote by separate voting
groups so long as the vote provided for is not less than a majority of
all the votes cast on the proposed dissolution by each voting group entitled
to vote on the transaction at a meeting at which a quorum of the voting
group exists.
At any time after dissolution is authorized, the corporation may dissolve
by filing with the Commission articles of dissolution that provide:
3. Either (i) a statement that dissolution was authorized by unanimous consent of the
shareholders, or (ii) a statement that the proposed dissolution was submitted to the shareholders by the
board of directors in accordance with the statutory provisions, and a statement
of
If the State Corporation Commission finds that the articles of dissolution
comply with the requirements of law and that the corporation has paid all
fees and taxes, and delinquencies thereof, imposed by laws administered
by the Commission, it will issue a certificate of dissolution.
A dissolved corporation continues its corporate existence but may not
carry on any business except that appropriate to wind up and liquidate
its business and affairs, including:
Dissolution of a corporation does not:
2. Prevent transfer
of its shares or securities, although the authorization to dissolve may
provide for closing the corporation's share transfer records; or
3. Subject its
directors to standards of conduct different from those prescribed in the
CODE OF VIRGINIA, Article 9;
4. Change quorum
or voting requirements for its board of directors or shareholders; change
provisions for selection, resignation, or removal of its directors or officers;
or change provisions for amending its bylaws;
6. Abate or
suspend a proceeding pending by or against the corporation on the effective
date of dissolution; or
A dissolved corporation may dispose of the known claims against it by
following the statutorily prescribed procedures. The dissolved corporation
must deliver to each of its known claimants written notice of the dissolution
at any time after its effective date. The written notice must:
2. State whether
the claim is admitted, or not admitted, and if admitted (i) the amount
that is admitted, which may be as of a given date, and (ii) any interest
obligation if fixed by an instrument of indebtedness;
4. State the
deadline, which may not be fewer than 120 days from the effective date
of the written notice, by which confirmation of the claim must be delivered
to the dissolved corporation; and
5. State that,
except to the extent that any claim is admitted, the claim will be barred
if written confirmation of the claim is not delivered by the deadline.
A claim against the dissolved corporation is barred to the extent that
it is not admitted:
1. If the dissolved
corporation has delivered written notice to the claimant in accordance
with the statutory provisions, and the claimant does not deliver written
confirmation of the claim to the dissolved corporation by the deadline;
or
2. If the dissolved
corporation delivered written notice to the claimant that his claim is
not admitted, in whole or in part, and the claimant does not commence a
proceeding to enforce the claim within ninety days from the delivery of
written confirmation of the claim to the dissolved corporation.
A "claim" does not include (i) a contingent liability or a claim based
on an event occurring after the effective date of dissolution or (ii) a
liability or claim the ultimate maturity of which is more than sixty days
after the delivery of written notice to the claimant.
If a liability exists, but the full extent of any damages is or may
not be ascertainable, and a proceeding to enforce the claim is commenced
pursuant to statute, the claimant may amend the pleadings after filing
to include any damages that occurred or are alleged to have occurred after
filing. The court having jurisdiction of such a claim
may continue the proceeding during its pendency if it appears that
further damages are or may be still occurring.
When a corporation has distributed all of its assets to its creditors
and shareholders and voluntary dissolution proceedings have not been revoked,
it must file articles of termination of corporate existence with the Commission.
The articles must set forth:
2. That all
the assets of the corporation have been distributed to its creditors and
shareholders; and
With the articles of termination of corporate existence, the corporation
must file a statement certifying that the corporation has filed returns
and has paid all state taxes to the time of the certificate. In contemplation
of submitting the required statement, the corporation may file returns
and pay taxes before such returns and taxes would otherwise be due.
If the Commission finds that the articles of termination of corporate
existence comply with the requirements of law and that all required fees
have been paid, it will issue a certificate of termination of corporate
existence. Upon the issuance of that certificate the existence of the corporation
ceases, except for the purpose of suits, other
proceedings and appropriate corporate action by shareholders, directors
and officers as provided by law.
The statement "that all the assets of the corporation have been distributed
to its creditors and shareholders" means that the corporation has divested
itself of all its assets by the payment of claims or liquidating dividends
or by assignment to a trustee or trustees for the benefit of claimants
or shareholders. If any person who is entitled to a share in the distribution
of the assets cannot be found, the corporation may, without awaiting the
one year mentioned in §55-210.7, pay his share to the State Treasurer
as abandoned property on complying with all applicable requirements of
§ 55-210.12 except subdivision 4 of subsection B of that section.
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