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What does it mean when a corporation is dissolved?

Dissolution of corporation refers to the closing of a corporate entity which can be a complex process. Ending a corporation becomes more complex with more owners and more assets.

What are the cause of dissolution?

There are three causes of dissolution: (1) by act of the partnerssome dissociations do trigger dissolution; (2) by operation of law; or (3) by court order. The partnership agreement may change or eliminate the dissolution trigger as to (1); dissolution by the latter two means cannot be tinkered with.

Why would a corporation dissolve?

Business dissolution can be caused in many ways, including the failure to file annual reports or pay certain taxes in the state of incorporation, bankruptcy, or voluntary dissolution by business owners.

Does a corporation dissolve on its own?

While there is no legal requirement that a corporation must dissolve if its no longer doing business, there are good reasons to do so. A small business that remains incorporated, even if it is inactive, must continue to file state and federal income taxes, even if it did no business during the year and had no income.

What are the methods of dissolving a corporation?

Modes of dissolution A corporation may be dissolved voluntarily or involuntarily. Voluntary dissolution could be done by (1) shortening the corporate term, (2) filing a request for dissolution (where no creditors are affected), and (3) filing a petition for dissolution (where creditors are affected).

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