Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
A corporation may also be dissolved by its board and shareholders.
The Board must propose and recommend dissolution to the shareholders. In the alternative, the Board may determine that it has a conflict of interest or that special circumstances exist which dictate that no recommendation can be made. In this case, the Board must tell the shareholders the basis for its determination. The Board may condition its proposal for dissolution on any basis.
The Board’s proposed dissolution is then submitted to the shareholders at a duly noticed shareholder meeting. All shareholders, whether entitled to vote on the Board’s recommendation or not, shall be notified of the meeting. Notice shall be timely given and the Notice shall state that one purpose of the meeting to vote on the dissolution of the corporation.
The shareholders vote on the proposed dissolution at the meeting. The proposal must be approved by the holders of a majority of the outstanding shares of the corporation entitled to vote.
If the dissolution is approved, a Certificate of Dissolution is filed.
Finally, if there is a shareholder agreement regarding dissolution that complies with §450.1488 of the Michigan Business Corporation Act, then the Shareholders can dissolve the corporation.
The corporation is dissolved when the Certificate of Dissolution is filed with the Michigan Department of Consumer and Industry Services. However, the corporation’s existence is continued for the purpose of “winding up” the affairs of the corporation.
During the winding up period, the corporation may only:
1. Collect its assets.
2. Sell or otherwise transfer assets which are not to be distributed in kind to its shareholders.
3. Pay its debts and other liabilities.
4. And do all other acts incident to liquidation of the corporations business and affairs.
During the winding up process of a dissolved corporation, its officers, directors and shareholders continue to function in the same manner as if dissolution had not occurred and title to the corporation’s assets remains in the corporation’s name until they are transferred. Shares may be transferred and the corporation may sue and be sued in its corporate name. Dissolution does not abate actions brought against the corporation prior to dissolution.
Corporate dissolution does not change quorum or voting requirements for the board or shareholders, and does not alter provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of bylaws or adoption of new bylaws.
No, that would not be legal as stated above and the co-owners of A and B would be personally liable for wrongfully doing such.
Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer.. I thank you in advance for taking the time to provide me a positive rating!If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.For example, you would state, "This question is for Law Pro . . . (then on with your question).Please keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.If you have additional questions, you may reply back to me using the Reply to Expert link and I will be happy to assist you further until your questions have been answered to your satisfaction.I wish you the best in your future.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).