Corporations – Corporate Dissolution – Washington
Related Washington Legal Forms
REVISED CODE OF WASHINGTON, §§ 23B.14.010 through 23B.14.400
There are three ways to dissolve a business corporation in the State of Washington: administratively, judicially, and voluntarily. This summary addresses only voluntary dissolution.
A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve a corporation by delivering to the Secretary of State a copy of a revenue clearance certificate issued pursuant to RCW 82.32.260 and articles of dissolution that set forth:
1. The name of the corporation;
2. The date of its incorporation;
3. Either that none of the corporation’s shares has been issued or that the corporation has not commenced business;
4. That no debt of the corporation remains unpaid;
5. That the net assets of the corporation remaining after winding up have been distributed to the shareholders if shares were issued; and
6. That a majority of the incorporators or initial directors authorized the dissolution.
A corporation’s board of directors may propose dissolution for submission to the shareholders. For a proposal to dissolve to be adopted:
1. The board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and
2. The shareholders entitled to vote must approve the proposal to dissolve. The board of directors may condition its submission of the proposal to dissolve on any basis.
The corporation must notify each shareholder, whether or not entitled to vote, of the proposed shareholders’ meeting in accordance with § 23B.14.020(5). The notice must also state that the purpose or one of the purposes of the meeting is to consider dissolving the corporation.
Unless the articles of incorporation or the board of requires a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a two-thirds majority of all the votes entitled to be cast on the proposal to dissolve.
At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State a copy of a revenue clearance certificate issued pursuant to RCW 82.32.260 and articles of dissolution that set forth:
1. The name of the corporation;
2. The date dissolution was authorized;
3. If shareholder approval was required for dissolution, a statement that dissolution was duly approved by the shareholders in accordance with RCW 23B.14.020.
A corporation is dissolved upon the effective date of its articles of dissolution.
A dissolved corporation continues its corporate existence but may not carry on any business, except that appropriate to wind up and liquidate its business and affairs, including:
1. Collecting its assets;
2. Disposing of its properties that will not be distributed in kind to its shareholders;
3. Discharging or making provision for discharging its liabilities;
4. Distributing its remaining property among its shareholders according to their interests; and
5. Doing every other act necessary to wind up and liquidate its business and affairs.
Dissolution of a corporation does not:
1. Transfer title to the corporation’s property;
2. Prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation’s share transfer records;
3. Subject its directors or officers to standards of conduct different from those prescribed in chapter 23B.08 RCW;
4. Change quorum or voting requirements for its board of directors or shareholders, change provisions for selection, resignation, or removal of its directors or officers or both, or change provisions for amending its bylaws;
5. Prevent commencement of a proceeding by or against the corporation in its corporate name;
6. Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or
7. Terminate the authority of the registered agent of the corporation. A dissolved corporation may dispose of the known claims against it by following the statutory procedures.
The dissolved corporation can notify its known claimants in writing of the dissolution at any time after its effective date. The written notice must:
1. Describe the information that must be included in a claim;
2. Provide a mailing address where a claim may be sent;
3. State the deadline, which may not be fewer than one hundred twenty days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and
4. State that the claim will be barred if not received by the deadline.
A claim against the dissolved corporation is be barred:
1. If a claimant who was given the statutory written notice does not deliver the claim to the dissolved corporation by the deadline; or
2. If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety days from the effective date of the rejection notice.
A claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.
Assets of a dissolved corporation that should be transferred to a creditor, claimant, or shareholder of the corporation who cannot be found or who is not competent to receive them may be reduced to cash and deposited with the state treasurer for safekeeping. If assets are transferred to the state treasurer, and if the creditor, claimant, or shareholder furnishes satisfactory proof of entitlement to the amount deposited, the state treasurer or other appropriate state official shall pay such person or such person’s representative that amount.
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