2007 California Corporations Code Chapter 19. Voluntary Dissolution

CA Codes (corp:1900-1907)

CORPORATIONS CODE
SECTION 1900-1907



1900.  (a) Any corporation may elect voluntarily to wind up and
dissolve by the vote of shareholders holding shares representing 50
percent or more of the voting power.
   (b) Any corporation which comes within one of the following
descriptions may elect by approval by the board to wind up and
dissolve:
   (1) A corporation as to which an order for relief has been entered
under Chapter 7 of the federal bankruptcy law.
   (2) A corporation which has disposed of all of its assets and has
not conducted any business for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
   (3) A corporation which has issued no shares.



1900.5.  (a) Notwithstanding any other provision of this division,
when a corporation has not issued shares, a majority of the
directors, or, if no directors have been named in the articles or
been elected, the incorporator or a majority of the incorporators may
sign and verify a certificate of dissolution stating the following:

   (1) That the certificate of dissolution is being filed within 12
months from the date the articles of incorporation were filed.
   (2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3).
   (3) That the tax liability will be satisfied on a taxes paid basis
or that a person or corporation or other business entity assumes the
tax liability, if any, of the dissolving corporation and is
responsible for additional corporate taxes, if any, that are assessed
and that become due after the date of the assumption of the tax
liability.
   (4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
   (5) That the corporation has not conducted any business from the
time of the filing of the articles of incorporation.
   (6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed to the persons entitled thereto or that the
corporation acquired no known assets, as the case may be.
   (7) That a majority of the directors, or, if no directors have
been named in the articles or been elected, the incorporator or a
majority of the incorporators authorized the dissolution and elected
to dissolve the corporation.
   (8) That the corporation has not issued any shares, and if the
corporation has received payments for shares from investors, those
payments have been returned to those investors.
   (9) That the corporation is dissolved.
   (b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
   (c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.



1901.  (a) Whenever a corporation has elected to wind up and
dissolve a certificate evidencing such election shall forthwith be
filed.
   (b) The certificate shall be an officers' certificate or shall be
signed and verified by at least a majority of the directors then in
office or by one or more shareholders authorized to do so by
shareholders holding shares representing 50 percent or more of the
voting power and shall set forth:
   (1) That the corporation has elected to wind up and dissolve.
   (2) If the election was made by the vote of shareholders, the
number of shares voting for the election and that the election was
made by shareholders representing at least 50 percent of the voting
power.
   (3) If the certificate is executed by a shareholder or
shareholders, that the subscribing shareholder or shareholders were
authorized to execute the certificate by shareholders holding shares
representing at least 50 percent of the voting power.
   (4) If the election was made by the board pursuant to subdivision
(b) of Section 1900, the certificate shall also set forth the
circumstances showing the corporation to be within one of the
categories described in said subdivision.
   (c) If an election to dissolve made pursuant to subdivision (a) of
Section 1900 is made by the vote of all the outstanding shares and a
statement to that effect is added to the certificate of dissolution
pursuant to Section 1905, the separate filing of the certificate of
election pursuant to this section is not required.




1902.  (a) A voluntary election to wind up and dissolve may be
revoked prior to distribution of any assets by the vote of
shareholders holding shares representing a majority of the voting
power, or by approval by the board if the election was by the board
pursuant to subdivision (b) of Section 1900.  Thereupon a certificate
evidencing the revocation shall be signed, verified and filed in the
manner prescribed by Section 1901.
   (b) The certificate shall set forth:
   (1) That the corporation has revoked its election to wind up and
dissolve.
   (2) That no assets have been distributed pursuant to the election.

   (3) If the revocation was made by the vote of shareholders, the
number of shares voting for the revocation and the total number of
outstanding shares the holders of which were entitled to vote on the
revocation.
   (4) If the election and revocation was by the board, that shall be
stated.


1903.  (a) Voluntary proceedings for winding up the corporation
commence upon the adoption of the resolution of shareholders or
directors of the corporation electing to wind up and dissolve, or
upon the filing with the corporation of a written consent of
shareholders thereto.
   (b) When a voluntary proceeding for winding up has commenced, the
board shall continue to act as a board and shall have full powers to
wind up and settle its affairs, both before and after the filing of
the certificate of dissolution.
   (c) When a voluntary proceeding for winding up has commenced, the
corporation shall cease to carry on business except to the extent
necessary for the beneficial winding up thereof and except during
such period as the board may deem necessary to preserve the
corporation's goodwill or going-concern value pending a sale of its
business or assets, or both, in whole or in part. The board shall
cause written notice of the commencement of the proceeding for
voluntary winding up to be given by mail to all shareholders (except
no notice need be given to the shareholders who voted in favor of
winding up and dissolving the corporation) and to all known creditors
and claimants whose addresses appear on the records of the
corporation.


1904.  If a corporation is in the process of voluntary winding up,
the superior court of the proper county, upon the petition of (a) the
corporation, or (b) a shareholder or shareholders who hold shares
representing 5 percent or more of the total number of any class of
outstanding shares, or (c) any shareholder or shareholders of a close
corporation, or (d) three or more creditors, and upon such notice to
the corporation and to other persons interested in the corporation
as shareholders and creditors as the court may order, may take
jurisdiction over such voluntary winding up proceeding if that
appears necessary for the protection of any parties in interest.  The
court, if it assumes jurisdiction, may make such orders as to any
and all matters concerning the winding up of the affairs of the
corporation and for the protection of its shareholders and creditors
as justice and equity may require.  The provisions of Chapter 18
(commencing with Section 1800) (except Sections 1800 and 1801) shall
apply to such court proceedings.


1905.  (a) When a corporation has been completely wound up without
court proceedings therefor, a majority of the directors then in
office shall sign and verify a certificate of dissolution stating:
   (1) That the corporation has been completely wound up.
   (2) That its known debts and liabilities have been actually paid,
or adequately provided for, or paid or adequately provided for as far
as its assets permitted, or that it has incurred no known debts or
liabilities, as the case may be. If there are known debts or
liabilities for payment of which adequate provision has been made,
the certificate shall state what provision has been made, setting
forth the name and address of the corporation, person or governmental
agency that has assumed or guaranteed the payment, or the name and
address of the depositary with which deposit has been made or any
other information that may be necessary to enable the creditor or
other person to whom payment is to be made to appear and claim
payment of the debt or liability.
   (3) That its known assets have been distributed to the persons
entitled thereto or that it acquired no known assets, as the case may
be.
   (4) That the corporation is dissolved.
   (5) If no certificate of election is to be filed pursuant to
subdivision (c) of Section 1901, that the election to dissolve was
made by the vote of all the outstanding shares.
   (6) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board, as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.

   (b) The certificate of dissolution shall be filed with the
Secretary of State and thereupon the corporate powers, rights, and
privileges of the corporation shall cease. The Secretary of State
shall notify the Franchise Tax Board of the dissolution.



1905.1.  If a corporation has filed a certificate of dissolution
with the Secretary of State on or after January 1, 1992, and before
the effective date of the act adding this section, pursuant to
Section 1905, prior to its amendment by the act adding this section,
and the Franchise Tax Board has not, as of that effective date, made
the determination required by subdivision (c) of Section 1905, prior
to its amendment by the act adding this section, then the corporation
shall be dissolved as of the date of filing the certificate of
dissolution and thereupon its corporate existence shall cease.



1906.  Except as otherwise provided by law, if the term of existence
for which any corporation was organized expires without renewal or
extension thereof, the board shall terminate its business and wind up
its affairs; and when the business and affairs of the corporation
have been wound up a majority of the directors shall execute and file
a certificate conforming to the requirements of Section 1905.




1907.  (a) The board, in lieu of filing the certificate of
dissolution, may petition the superior court of the proper county for
an order declaring the corporation duly wound up and dissolved.
Such petition shall be filed in the name of the corporation.
   (b) Upon the filing of the petition, the court shall make an order
requiring all persons interested to show cause why an order should
not be made declaring the corporation duly wound up and dissolved and
shall direct that the order be served by notice to all creditors,
claimants and shareholders in the same manner as the notice given
under subdivision (b) of Section 1807.
   (c) Any person claiming to be interested as shareholder, creditor
or otherwise may appear in the proceeding at any time before the
expiration of 30 days from the completion of publication of the order
to show cause and contest the petition, and upon failure to appear
such person's claim shall be barred.
   (d) Thereafter an order shall be entered and filed and have the
effect as prescribed in Sections 1808 and 1809.

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