Corporations – Corporate Dissolution – Massachusetts
Related Massachusetts Legal Forms
Statutory References: GENERAL LAWS OF MASSACHUSETTS, Title XXII, Chapter 155 (§§ 50, 51, 51A) and Chapter 156B (§§ 100, 102, 103)
The General Laws of Massachusetts have what appears to be a conflict regarding the correct procedure for voluntarily dissolving a Massachusetts corporation, hence, there are two statutory references listed above.
Chapter 155 (General Provisions Relative to Corporations) provides a dissolution procedure that is not unlike the procedure set out in Chapter 156B (Certain Business Corporations). Using the Chapter 155 procedures, the dissolution can be instituted by as few as 40% of the shareholders and is a purely judicial action. The Chapter 156B procedures, while ultimately requiring judicial approval, are the result of a vote of 2/3 of the shareholders (or such percentage as may be set out in the Articles of Organization).
This summary is for a dissolution which follows the statutory procedures set forth in Chapter 156B. The additional statutory reference is provided if you wish to compare the two procedures.
A Massachusetts corporation may be dissolved if that dissolution is authorized by a 2/3 vote of the shareholders, unless a greater or lesser percentage is provided for in the Articles of Organization of the corporation.
Within thirty days from the date the dissolution is authorized, notice of that authorization must be mailed to the Commissioner of Revenue. Thereafter, Articles of Dissolution are filed with the Secretary of the Commonwealth.
Once the corporation is “dissolved,” it continues its corporate existence for three years in order to accomplish settle and close its affairs. During this period, the corporation may, in its own name, prosecute and defend suits by or against it, dispose of and convey its property, and make distributions to its stockholders of any assets remaining after the payment of its debts and obligations. The corporation MAY NOT continue to do business as the corporation did before the dissolution.
For the purposes of any suit brought by or against the corporation during this three year period, the three years is extended for ninety days after the last final judgment in any such litigation.
At the conclusion of the three year period (or the extension thereof), or at any time during the three year period, the corporation may petition the Supreme Judicial or Superior Court to distribute all or part of its assets to the shareholders. The Court will require certified or registered mail notice to the known creditors of the corporation as well as to the Secretary of the Commonwealth and the Commissioner of Corporations and Taxation. Notice will also be required to be published in a newspaper of general circulation in the city or town where the corporation is located. After a hearing, the Court may, upon determination that the interests of the Commonwealth and the various creditors of the corporation have been adequately protected, enter a decree permitting the distribution of the assets to the shareholders.
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