Notice of Dissolution of a Corporation to Debtors and Creditors

When a business, organization or corporation ceases to carry on its business or plan for dissolution to avoid the cost and filing of annual tax and corporation taxes, the Board of Directors or shareholders may opt for the dissolution or terminate its existence.

It is necessary to remember that, before carrying out the dissolution process, the corporation must settle and clear its debts, liabilities, and obligations by remitting the due amount to these personnel by making payments to the Public Trustee of Companies. The payment should equal the total debt amount payable to the creditors. It is also essential that, if any debt is not cleared, the approval or consent of such creditor must be taken prior to dissolution.

The basic procedure for Dissolution under the existing Act can be surmised as follows:

Special Resolution of Share holders

• The share holders must agree and pass a special resolution to dissolve the corporation. A Special Resolution is known as a shareholders resolution, which is passed by two third majorities.

Articles of Dissolution

• Articles of Dissolution must be filed with the respective state    government Agency or Companies and Personal Property Security Branch.

Corporate Tax Consent

• A Letter consenting to dissolution, bearing original signature must be obtained from Corporations Tax Branch, Ministry of Finance and submitted with the Articles of Dissolution to the Tax Corp. Branch. Such process must be carried out within 60 days of the issue of the consent dissolution letter.

Covering Letter and Filing Fee

• The Article of Dissolution and Corporations Tax Branch consent letter must accompany Covering Letter with contact name, return address and telephone number  and Filing Fee of $ ________.

                
Covering Letter and Filing Fee:
The Articles of Dissolution and Corp Tax letter must be accompanied by a covering letter giving a contact name, return address and telephone number and a filing fee of $________.

Revenue Agency

• It is necessary to take dissolution consent Certificate of specific state Revenue Agency for the clearance of amount payable owned by the corporation, because non availability of such Certificate may make Directors and Officers personally liable of these payments under Income Tax Act.

But before starting the Dissolution process, Notice of Intent to Dissolve must be send to all concerned parties and state agency. Some states even require the corporate to notify creditors and general public through Dissolution Notice.

Below given Notice of Dissolution of a Corporation to Debtors and Creditors will guide you, when you also dissolve your organization and send the Notices of Dissolution. Different states have different requirements, thus advice of the legal personnel can be sought, while drafting such notices:

Notice of Dissolution of a Corporation   to Debtors and Creditors
              

To:

 Name_______________________

Address____________________

Please be advised that the____________[corporation/the partnership between_____________ ( partner names) limited liability company between__________ (member names) known as___________ ( name of business), doing business at_____________ ( address) will be dissolved by [shareholder and director resolution/mutual consent of the partners/mutual consent of the members, pursuant to the terms of the limited liability company agreement by________________[reason] as of (insert dissolution date).

1. All claims against the assets of the____________[corporation/partnership/limited liability company must be made in writing and include the claim amount, basis and origination date.

2. The deadline for submitting claims is (insert date reflecting the minimum number of days allowed pursuant to state statute).

3. Any claims that are not received by the corporation/partnership/limited liability company prior to the date set forth above will not be recognized.

4. Debtors are requested to pay all outstanding obligations no later than___________(number of days) days from the date of this notice. Payments should be made to_________ (name of individual or entity designated to receive payment).

5. All claims and payments must be sent to______________ (address).

Dated:_______________( date that notice is mailed)

(Signatures of:

[Corporate secretary]_______________

[Partners]___________________

[Limited liability members]________________