Involuntary Dissolution is the result of an administrative action taken by the filing office or tax administrator in a state. The company is generally notified of the impending dissolution and after a specified period of time is marked inactive on the filing office's records. Voluntary dissolution is initiated by the company itself, which will take steps similar to those listed below which summarize the process for a Delaware corporation.
1. Approval of the Dissolution: The Board of Directors must first draft and approve a resolution to dissolve and then either call a meeting of shareholders for the specific purpose of approving the resolution. For a Delaware corporation, a majority of the voting shares must consent to the dissolution; in other states, a super majority may be required.
2. Filing the Certificate of Dissolution: The next step is to file the Certificate of Dissolution, which is a fairly simple document.
3. Winding Up: After a Certificate of Dissolution is filed in Delaware, the company continues for three years to give it time to wind up its affairs. During this period, the company can settle any suits against them, discharge any liabilities, distribute assets to shareholders and, if desired, provide notice to claimants, establishing procedures and time frames for establishing a claim. During the winding up period, the company must also terminate its authority to do business in any state where it is registered as a foreign corporation.