Learn what corporate dissolution is and why it's important. And get our free corporate dissolution template!
A corporate dissolution is the process that, quite literally, ends the legal existence of a corporation.
As a legal structure, corporations have the benefit of perpetual existence. This means that corporations live forever, unless some action takes place that causes their dissolution.
Corporations can dissolve for different reasons, some of which may include:
A voluntary dissolution will typically require the authorization of various stakeholders including the shareholders of the corporation and the government.
Because corporations are separate legal entities from their directors, employees and shareholders, if a corporation as outstanding liabilities to, for example, the government tax department, the government will have an interest in ensuring that the corporation does not cease to legally exist until all of its debts are paid.
Dissolving a company can be a pretty straightforward exercise once all approvals have been received. This can vary by jurisdiction but likely involves the following steps:
Although a dissolution is a fairly straightforward legal transaction, it can be tedious to get all the various forms and precedents in order. If you want to get started on a dissolution download our free company dissolution template as a getting started resource!