2006 Ohio Revised Code - 1701.86. Voluntary dissolution.

§ 1701.86. Voluntary dissolution.
 

(A)  A corporation may be dissolved voluntarily in the manner provided in this section, provided the provisions of Chapter 1704. of the Revised Code do not prevent the dissolution from being effected. 

(B)  A resolution of dissolution for a corporation shall set forth: 

(1) That the corporation elects to be dissolved; 

(2) Any additional provision considered necessary with respect to the proposed dissolution and winding up. 

(C)  If an initial stated capital is not set forth in the articles then before the corporation begins business, or if an initial stated capital is set forth in the articles then before subscriptions to shares shall have been received in the amount of that initial stated capital, the incorporators or a majority of them may adopt, by a writing signed by them, a resolution of dissolution. 

(D)  The directors may adopt a resolution of dissolution in the following cases: 

(1) When the corporation has been adjudged bankrupt or has made a general assignment for the benefit of creditors; 

(2) By leave of the court, when a receiver has been appointed in a general creditors' suit or in any suit in which the affairs of the corporation are to be wound up; 

(3) When substantially all of the assets have been sold at judicial sale or otherwise; 

(4) When the articles have been canceled for failure to file annual franchise or excise tax returns or for failure to pay franchise or excise taxes and the corporation has not been reinstated or does not desire to be reinstated; 

(5) When the period of existence of the corporation specified in its articles has expired. 

(E)  The shareholders at a meeting held for such purpose may adopt a resolution of dissolution by the affirmative vote of the holders of shares entitling them to exercise two-thirds of the voting power of the corporation on such proposal or, if the articles provide or permit, by the affirmative vote of a greater or lesser proportion, though less than a majority, of such voting power, and by such affirmative vote of the holders of shares of any particular class as is required by the articles. Notice of the meeting of the shareholders shall be given to all the shareholders whether or not entitled to vote at it. 

(F)  Upon the adoption of a resolution of dissolution, a certificate shall be prepared, on a form prescribed by the secretary of state, setting forth the following: 

(1) The name of the corporation; 

(2) A statement that a resolution of dissolution has been adopted; 

(3) A statement of the manner of adoption of such resolution, and, in the case of its adoption by the incorporators or directors, a statement of the basis for such adoption; 

(4) The place in this state where its principal office is or is to be located; 

(5) The names and addresses of its directors and officers, unless the resolution of dissolution is adopted by the incorporators, in which event the names and addresses of the incorporators shall be set forth in the certificate; 

(6) The name and address of its statutory agent; 

(7) The date of dissolution, if other than the filing date. 

(G)  Such certificate shall be signed as follows: 

(1) When the resolution of dissolution is adopted by the incorporators or a majority of them, the certificate shall be signed by not less than a majority of them; 

(2) When the resolution is adopted by the directors or by the shareholders, the certificate shall be signed by any authorized officer, unless the officer fails to execute and file such certificate within thirty days after the adoption of the resolution or upon any date specified in the resolution as the date upon which such certificate is to be filed or upon the expiration of any period specified in the resolution as the period within which such certificate is to be filed, whichever is latest, in which event the certificate of dissolution may be signed by any three shareholders and shall set forth a statement that the persons signing the certificate are shareholders and are filing the certificate because of the failure of the officers to do so. 

(H)  A certificate of dissolution, filed with the secretary of state, shall be accompanied by: 

(1) An affidavit of one or more of the persons executing the certificate of dissolution or of an officer of the corporation containing a statement of the counties, if any, in this state in which the corporation has personal property or a statement that the corporation is of a type required to pay personal property taxes to state authorities only; 

(2) A receipt, certificate, or other evidence showing the payment of all franchise, sales, use, and highway use taxes accruing up to the date of such filing or, if applicable, to the later date specified in the certificate of dissolution in accordance with division (F) of this section, or that such payment has been adequately guaranteed; 

(3) A receipt, certificate, or other evidence showing the payment of all personal property taxes accruing up to the date of such filing or, if applicable, to the later date specified in the certificate of dissolution in accordance with division (F) of this section, or that such payment has been adequately guaranteed; 

(4) A receipt, certificate, or other evidence from the director of job and family services showing that all contributions due from the corporation as an employer have been paid, or that such payment has been adequately guaranteed, or that the corporation is not subject to such contributions; 

(5) A receipt, certificate, or other evidence from the bureau of workers' compensation showing that all premiums due from the corporation as an employer have been paid, or that such payment has been adequately guaranteed, or that the corporation is not subject to such premium payments; 

(6) In lieu of the receipt, certificate, or other evidence described in division (H)(2), (3), (4), or (5) of this section, an affidavit of one or more persons executing the certificate of dissolution or of an officer of the corporation containing a statement of the date upon which the particular department, agency, or authority was advised in writing of the scheduled effective date of the dissolution and was advised in writing of the acknowledgment by the corporation of the applicability of the provisions of section 1701.95 of the Revised Code. 

(I)  Upon the filing of a certificate of dissolution and such accompanying documents or on a later date specified in the certificate that is not more than ninety days after the filing, the corporation shall be dissolved. 
 

HISTORY: 126 v 432(486) (Eff 10-11-55); 127 v 231 (Eff 10-1-57); 128 v 1165 (Eff 11-2-59); 130 v S 121 (Eff 9-24-63); 133 v H 1 (Eff 3-18-69); 135 v S 155 (Eff 9-30-74); 137 v H 297 (Eff 10-20-78); 140 v H 250 (Eff 7-30-84); 143 v H 222 (Eff 11-3-89); 143 v S 321 (Eff 4-11-90); 146 v H 495 (Eff 10-4-96); 148 v H 471 (Eff 7-1-2000); 149 v H 278. Eff 5-16-2002.
 

Analogous in part to former RC § 1701.86 (GC § 8623-79; 112 v 9(40), § 79; 113 v 413(450,451); Bureau of Code Revision, 10-1-53), repealed 126 v 432, § 5, eff 10-11-55. See former RC § 1701.87 (GC § 8623-80; 112 v 9(41), § 80; 113 v 413(451); 121 v 107; Bureau of Code Revision, 10-1-53) except for the second paragraph; and see former RC § 1701.88 (GC § 8623-80a; 119 v 821; Bureau of Code Revision, 10-1-53), former RC §§ 1701.87, 1701.88 repealed 126 v 432, § 5, eff 10-11-55.

 

19xx Committee Report or Comment.
 

1978 COMMITTEE COMMENT

The requirement for furnishing receipts or certificate of payment of the taxes and fees described in Section 1701.86(H) has been a growing problem for several years. In some departments and under some circumstances the necessary receipt may be obtained promptly, but in many cases because of auditing requirements or otherwise, a delay of several weeks or several months may be involved. The result is that it is frequently difficult to effectively dissolve a corporation within a scheduled time period and without unreasonable delay. The most common complaint under the current procedure is that a delay in filing the certificate of dissolution beyond December 31 of any year will result in franchise tax liability for the succeeding year. There are, however, many valid reasons for planning and carrying out corporate dissolutions without the uncertainty that results from delays in obtaining these receipts. The office of the Secretary of State has attempted to meet the needs of lawyers and their clients in this area by permitting the receipts to be filed subsequent to the filing of the certificate of dissolution, but this procedure has created unnecessary clerical work in that office and requires liberal interpretation of the present statute. 

The amendments proposed by the Corporation Law Committee would remove the uncertainty and delay which is created by any requirement that conditions the effectiveness of the filing of the certificate of dissolution on receipts issued by various state departments. The proposed procedure would require notification of each department concerned but would rely upon Sections 1701.95 and 1702.55 for enforcement of the dissolving corporation's tax and other obligations to the state. Under these sections, the shareholders and directors or trustees who vote for the distribution of assets of the corporation without making provision for payment of the corporation's obligations may be personally liable. The Committee believes that these sections which impose personal liability on directors provide adequate guarantees of payment of obligations to the State. 
 

1963 COMMITTEE COMMENT

The reason for this amendment is the fact that many corporations desire to carry out liquidation of their assets prior to the filing of the Certificate of Dissolution with the Secretary of State. This often is done in connection with Section 337 liquidations (the one-year liquidation provision of the Internal Revenue Code) where it is more important to have the resolution of dissolution adopted by the shareholders prior to the approval of any agreement of sale for the assets of the corporation. It would be unfortunate if under such circumstances a shareholder took advantage of the present provision and filed the Certificate within thirty days after its adoption. The new provision permits the corporation to specify in the resolution the date when the Certificate of Dissolution is to be filed or the time during which the Certificate should be filed, and only thereafter may a shareholder file the Certificate. 
 

1955 COMMITTEE COMMENT

The foregoing is a combination of present Secs. 1701.86, 1701.87, and 1701.88, with the elimination, however, of the second paragraph of present Sec. 1701.87, the substance of which is set forth in new Sec. 1701.88. The provision in present Sec. 1701.86 relating to the consent of shareholders to dissolution has been eliminated as new Sec. 1701.54 permits only type of shareholder action by unanimous written consent. The last paragraph of present Sec. 1701.87 is eliminated, because the distribution therein described would be one made before dissolution and is therefore not a proper subject for this new section. In the above draft, there has been included the provision found in present Sec. 1701.88, relating to the withdrawal of foreign corporations, although that provision should eventually be transferred to the chapter dealing with Foreign Corporations.