Corporations – Corporate Dissolution – Minnesota
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MINNESOTA STATUTES, §§ 302A.701 through 302A.791
In Minnesota, a corporation may be dissolved by the incorporators, by the shareholders, by order of a court, or by the secretary of state. Additionally, a voluntary dissolution may be completed with or without notice to creditors and claimants. THIS SUMMARY ADDRESSES ONLY VOLUNTARY DISSOLUTION BY INCORPORATORS OR SHAREHOLDERS WHERE NOTICE TO CREDITORS AND CLAIMANTS IS GIVEN.
A corporation that has not issued shares may be dissolved by the incorporators or directors if a majority of the incorporators or directors filing articles of dissolution containing:
(1) The name of the corporation;
(2) The date of incorporation;
(3) A statement that shares have not been issued;
(4) A statement that all consideration received from subscribers for shares to be issued, less expenses incurred in the organization of the corporation, has been returned to the subscribers; and
(5) A statement that no debts remain unpaid.
A corporation may be dissolved by the shareholders. Written notice must be given to each shareholder, whether or not entitled to vote at a meeting of shareholders, within the time and in the manner provided by law for notice of meetings of shareholders and, whether the meeting is a regular or a special meeting, the notice must state that a purpose of the meeting is to consider dissolving the corporation.
If the proposed dissolution is approved at a meeting by the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote, dissolution shall be commenced.
If dissolution of the corporation is approved by the shareholders, the corporation must file with the secretary of state a notice of intent to dissolve. The notice must contain:
(a) The name of the corporation;
(b) The date and place of the meeting at which the resolution was approved;
(c) A statement that the requisite vote of the shareholders was received, or that all shareholders entitled to vote signed a written action. The filing with the secretary of state of a notice of intent to dissolve does not affect any remedy in favor of the corporation or any remedy against it or its directors, officers, or shareholders in those capacities, except as provided by law.
When the notice of intent to dissolve has been filed with the secretary of state, the corporation must cease to carry on its business except to the extent necessary for the winding up of the corporation. The shareholders retain the right to revoke the dissolution and the right to remove directors or fill vacancies on the board. Corporate existence continues to the extent necessary to wind up the affairs of the corporation until the dissolution proceedings are revoked or articles of dissolution are filed with the secretary of state.
When a notice of intent to dissolve has been filed with the secretary of state, the board, or the officers acting under the direction of the board, must proceed as soon as possible:
(a) To collect or make provision for the collection of all known debts due or owing to the corporation, including unpaid subscriptions for shares;
(b) Except as provided by law, to pay or make provision for the payment of all known debts, obligations, and liabilities of the corporation according to their priorities; and
(c) To give notice to creditors and claimants under §302A.727 or to proceed under section §302A.7291. When a notice of intent to dissolve has been filed with the secretary of state, the directors may sell, lease, transfer, or otherwise dispose of all or substantially all of the property and assets of a dissolving corporation without a vote of the shareholders.
All tangible or intangible property, including money, remaining after the discharge of, or after making adequate provision for the discharge of, the debts, obligations, and liabilities of the corporation must be distributed to the shareholders in accordance with §302A.551 (4).
When a notice of intent to dissolve has been filed with the secretary of state, the corporation may give notice of the filing to each creditor of and claimant against the corporation known or unknown, present or future, and contingent or noncontingent. If notice to creditors and claimants is given, it must be given by publishing the notice once each week for four successive weeks in a legal newspaper in the county or counties where the registered office and the principal executive office of the corporation are located and by giving written notice to known creditors and claimants.
The notice to creditors and claimants must contain:
(a) A statement that the corporation is in the process of dissolving;
(b) A statement that the corporation has filed with the secretary of state a notice of intent to dissolve;
(c) The date of filing the notice of intent to dissolve;
(d) The address of the office to which written claims against the corporation must be presented; and
(e) The date by which all the claims must be received, which must be the later of 90 days after published notice or, with respect to a particular known creditor or claimant, 90 days after the date on which written notice was given to that creditor or claimant. Published notice is deemed given on the date of first publication for the purpose of determining this date.
A corporation that gives notice to creditors and claimants has 30 days from the receipt of each claim filed according to the procedures set forth by the corporation on or before the date set forth in the notice to accept or reject the claim by giving written notice to the person submitting it. A claim not expressly rejected is deemed accepted.
A creditor or claimant to whom notice is given and whose claim is rejected by the corporation has 60 days from the date of rejection, 180 days from the date the corporation filed with the secretary of state the notice of intent to dissolve, or 90 days after the date on which notice was given to the creditor or claimant, whichever is longer, to pursue any other remedies with respect to the claim.
A creditor or claimant to whom notice is given who fails to file a claim according to the procedures set forth by the corporation on or before the date set forth in the notice is barred from suing on that claim or otherwise realizing upon or enforcing it, except as provided in §302A.781.
A creditor or claimant whose claim is rejected by the corporation is barred from suing on that claim or otherwise realizing upon or enforcing it if the creditor or claimant does not initiate legal, administrative, or arbitration proceedings with respect to the claim within the time provided by law.
Articles of dissolution for a corporation that has given notice to creditors and claimants under this section must be filed with the secretary of state after:
(1) the 90-day has expired and the payment of claims of all creditors and claimants filing a claim within that period has been made or provided for; or
(2) the longest of the periods described above has expired and there are no pending legal, administrative, or arbitration proceedings by or against the corporation commenced within the time provided. Articles of dissolution must state:
(1) the last date on which the notice was given and that the payment of all creditors and claimants filing a claim within the 90-day period has been made or provided for or the date on which the longest of the periods described above expired;
(2) that the remaining property, assets, and claims of the corporation have been distributed among its shareholders in accordance with the statutory provisions or that adequate provision has been made for that distribution; and
(3) that there are no pending legal, administrative, or arbitration proceedings by or against the corporation commenced within the time provided or that adequate provision has been made for the satisfaction of any judgment, order, or decree that may be entered against it in a pending proceeding.
When the articles of dissolution have been filed with the secretary of state, the corporation is dissolved.
After the notice of intent to dissolve has been filed with the secretary of state and before a certificate of dissolution has been issued, the corporation or, for good cause shown, a shareholder or creditor may apply to a court within the county in which the registered office of the corporation is situated to have the dissolution conducted or continued under the supervision of the court as provided in §§ 302A.751 to 302A.781.
Upon dissolution of a corporation, the portion of the assets distributable to a shareholder who is unknown or cannot be found, or who is under disability, if there is no person legally competent to receive the distributive portion, must be reduced to money and deposited with the state treasurer. The amount deposited is appropriated to the state treasurer and must be paid over to the shareholder or a legal representative, upon proof satisfactory to the state treasurer of a right to payment.
A creditor or claimant whose claims are barred by law includes a person who is or becomes a creditor or claimant at any time before, during, or following the conclusion of dissolution proceedings, and all those claiming through or under the creditor or claimant.
At any time within one year after articles of dissolution have been filed with the secretary of state or a decree of dissolution has been entered, a creditor or claimant who shows good cause for not having previously filed the claim may apply to a court in this state to allow a claim against the corporation to the extent of undistributed assets or, if the undistributed assets are not sufficient to satisfy the claim, against a shareholder, whose liability must be limited to a portion of the claim that is equal to the portion of the distributions to shareholders in liquidation or dissolution received by the shareholder, but in no event may a shareholder’s liability exceed the amount which that shareholder actually received in the dissolution.
All known contractual debts, obligations, and liabilities incurred in the course of winding up the corporation’s affairs must be paid or provided for by the corporation before the distribution of assets to a shareholder. A person to whom this kind of debt, obligation, or liability is owed but not paid may pursue any remedy before the expiration of the applicable statute of limitations against the officers and directors of the corporation who are responsible for, but who fail to cause the corporation to pay or make provision for payment of the debts, obligations, and liabilities or against shareholders to the extent permitted by law.
After a corporation has been dissolved, any of its former officers, directors, or shareholders may assert or defend, in the name of the corporation, any claim by or against the corporation.
Title to assets remaining after payment of all debts, obligations, or liabilities and after distributions to shareholders may be transferred by a court in this state.
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