Judicial Dissolution
Judicial Dissolution
- As the name implies, Judicial Dissolution is the dissolution or
termination of a corporation's existence that is handled through the
courts of the state of incorporation. The attorney general of the state of
incorporation may petition for judicial dissolution by alleging a failure to
comply with statutory, administrative or tax regulations; that the corporate charter
was obtained through fraud; an abuse of corporate powers; a failure to commence
business or an abandonment of the
business.
Or a shareholder may petition for judicial dissolution on the grounds that there is a deadlock of directors which shareholders cannot break; a deadlock of shareholders preventing them from electing directors or an abuse of corporate powers by the directors such as by committing fraud or other illegal acts or by wasting or misapplying corporate assets. A minority shareholder may also petition for judicial dissolution by alleging that there has been a freeze-out of a minority shareholder.
Pursuant to the laws of some states, under certain circumstances specified in the law, creditors of the corporation may petition for judicial dissolution. Under the laws of some states, after approval of the Board of Directors, the corporation may petition for judicial dissolution if the Corporation is insolvent, or if all of its shareholders will benefit by a judicial dissolution. See Dissolution of a Corporation.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
Or a shareholder may petition for judicial dissolution on the grounds that there is a deadlock of directors which shareholders cannot break; a deadlock of shareholders preventing them from electing directors or an abuse of corporate powers by the directors such as by committing fraud or other illegal acts or by wasting or misapplying corporate assets. A minority shareholder may also petition for judicial dissolution by alleging that there has been a freeze-out of a minority shareholder.
Pursuant to the laws of some states, under certain circumstances specified in the law, creditors of the corporation may petition for judicial dissolution. Under the laws of some states, after approval of the Board of Directors, the corporation may petition for judicial dissolution if the Corporation is insolvent, or if all of its shareholders will benefit by a judicial dissolution. See Dissolution of a Corporation.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
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