Alabama Dissolution Package to Dissolve Corporation
DOMESTIC FOR-PROFIT CORPORATION
ARTICLES OF DISSOLUTION
ALABAMA
STATUTORY REFERENCES
CODE OF ALABAMA, Title 10, Article 14 (Dissolution)
An Alabama corporation can be dissolved voluntarily, administratively,
or judicially. THIS SUMMARY ADDRESSES ONLY VOLUNTARY DISSOLUTION.
A majority of the incorporators or initial directors of a corporation
that has not issued shares or has not commenced business may dissolve the
corporation by delivering for filing to the probate judge articles of dissolution
that set forth:
(1) The name of the corporation;
(2) The date of its incorporation;
(3) Either (i) that none of the corporation's shares has been issued
or (ii) that the corporation has not commenced business;
(4) That no debt of the corporation remains unpaid;
(5) That the net assets of the corporation remaining after winding
up have been distributed to the shareholders, if shares were issued; and
(6) That a majority of the incorporators or initial directors authorized
the dissolution.
A 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 interest 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 by law.
Subject to the corporation's articles of incorporation, the board
of directors may condition its submission of the proposal for dissolution
on any basis. The board of directors may not decrease the vote required
for approval required by statute.
The corporation must notify each shareholder, whether or not entitled
to vote, of the proposed shareholders' meeting. The notice must also
state that the purpose, or one of the purposes, of the meeting is to consider
dissolving the corporation.
Unless the articles of incorporation require a greater or lesser vote
or a vote by voting groups, 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 each voting group entitled to vote separately on the
proposal by two thirds of all the votes entitled to be cast on the proposal
by that voting group; but in no case may the vote required for shareholder
approval be set at less than a majority of all the votes entitled to be
cast on the proposal by each voting group.
A corporation may be dissolved by the written consent of all of its
shareholders, whether or not otherwise entitled to vote, without action
by the corporation's board of directors. A copy of the written consent
or consents signed by all shareholders of the corporation must be filed
with the Articles of Dissolution
A corporation is dissolved upon the effective date of its articles 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:
(1) Collecting its assets;
(2) Disposing of its properties that will not be distributed in kind
to its shareholders;
(3) Discharging or making provision for discharging its liabilities;
(4) Distributing its remaining property among its shareholders according
to their interests; and
(5) Doing every other act necessary to wind up and liquidate its business
and affairs.
Dissolution of a corporation does not:
(1) Alter the limited liability status of its subscribers and
shareholders under §10-2B-6.22, except as provided in §10-2B-14.07(d)(2)
with respect to assets distributed to a shareholder in liquidation;
(2) Transfer title to the corporation's property;
(3) Prevent transfer of its shares or securities, although the authorization
to dissolve may provide for closing the corporation's share transfer records;
(4) Subject its directors or officers to standards of conduct different
from those prescribed by law;
(5) 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 both; or change provisions for amending
its bylaws;
(6) Prevent commencement of a proceeding by or against the corporation
in its corporate name;
(7) Abate or suspend a proceeding pending by or against the corporation
on the effective date of dissolution;
(8) Terminate the authority of the registered agent of the corporation;
or
(9) Result in the corporation's name becoming available for use by
another corporation under §10-2B-4.01 until the time for revocation
of dissolution has elapsed or, in the case of a corporation administratively
dissolved under §10-2B-14.21, the time for filing an application for
reinstatement has elapsed without the filing of such an application, or,
if an application is filed, until its final adjudication, including all
appeals.
A dissolved corporation may dispose of the known claims against
it. The dissolved corporation must notify its known claimants in
writing of the dissolution at any time after its effective date. The written
notice must:
(1) Describe information that must be included in a claim;
(2) Provide a mailing address where a claim may be sent;
(3) State the deadline, which may not be fewer than 120 days from the
effective date of the written notice, by which the dissolved corporation
must receive the claim; and
(4) State that the claim will be barred if not received by the deadline.
A claim against the dissolved corporation is barred:
(1) If a claimant who was given written notice does not deliver
the claim to the dissolved corporation by the deadline;
(2) If a claimant whose claim was rejected by the dissolved corporation
does not commence a proceeding to enforce the claim within 90 days from
the effective date of the rejection notice.
A "known claim" or "claim" includes unliquidated claims but does not include
a contingent liability that has not matured so that there is no immediate
right to bring suit, or a claim based on an event occurring after the effective
date of dissolution.
A dissolved corporation may also publish notice of its dissolution and
request that persons with claims against the corporation present them in
accordance with the notice. The notice must:
(1) Be published one time in a newspaper of general circulation
in the county where the dissolved corporation's principal office (or, if
none in this state, its registered office) is or was last located;
(2) Describe the information that must be included in a claim and provide
a mailing address where the claim may be sent; and
(1) State that a claim against the corporation will be barred unless
a proceeding to enforce the claim is commenced within two years after the
publication of the notice.
If the dissolved corporation publishes a newspaper notice in accordance
with the statute. the claim of each of the following claimants is barred
unless the claimant commences a proceeding to enforce the claim against
the dissolved corporation within two years after the publication date of
the newspaper notice:
(1) A claimant who did not receive written notice;
(2) A claimant whose claim was timely sent to the dissolved corporation
but not acted on;
(3) A claimant whose claim is contingent or based on an event occurring
after the effective date of dissolution.
If the statutory publication procedures are followed, a claim may be enforced:
(1) Against the dissolved corporation, to the extent of its
undistributed assets; or
(2) If the assets have been distributed in liquidation, against a shareholder
of the dissolved corporation to the extent of his or her pro rata share
of the claim or the corporate assets distributed to him or her in liquidation,
whichever is less, but a shareholder's total liability for all claims under
this section may not exceed the total amount of assets distributed to him
or her in liquidation.
None of the provisions for disposing of claims extends any otherwise
applicable statute of limitations.
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 must be reduced to cash and deposited
with the Commissioner of Revenue for safekeeping. When the creditor,
claimant, or shareholder furnishes satisfactory proof of entitlement to
the amount deposited, the Commissioner of Revenue must pay him or her or
his or her representative that amount.
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