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Richard
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how to shut down a delaware c corporation without shareholder

Customer Question

how to shut down a delaware C corporation without shareholder approval. We have a DE C Corp that ceased operations 2 years ago. All assets are sold or zero valued. The BODs have voted to shut down, but we will not get a majority vote to shut down. The largest VC investor has ceased its involvement and will no longer vote on anything. There are no assets, the BOD have voted to shut down. What can we do next?
Submitted: 4 years ago.
Category: Business Law
Expert:  Richard replied 4 years ago.

Good afternoon. Actually, you are probably better off just letting this C corporation sit there dormant. When you liquidate and dissolve a corporation, the shareholders must represent that the debts and liabilities of the corporation have been provided for. Many legal commentators fear that this potentially opens the shareholders up to personal liability for the corporate liabilities and thus recommend that you simply leave the corporation in existence and let it sit dormant.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Richard, Attorney
Category: Business Law
Satisfied Customers: 47027
Experience: 32 years of experience practicing law and a businessman.
Richard and 5 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
I appreciate your response and it matches what I have heard informally form the state and from others. But the BOD really want to close down the corp to start the clock ticking on ending their liabilty. We have no assets left and so to leave the corp dormant woudl couldn't even pay the yearly fees. Is there no way to force a shutdown if we have no assets and the BODs have voted to shut down the corp? We are not having any luck finding a reasonable answer.
Expert:  Richard replied 4 years ago.
I don't suggest you pay any annual fees. No one is liable for those. The corporation can forfeit its charter. That's all fine...just don't liquidate and dissolve it. If the shareholders, who own the company, won't vote, you can't force them. You can, however, resign as directors.

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