How to Dissolve Your Corporation in Minnesota

71057022-business,-bankruptcySometimes the shareholders of a corporation decide that it is time to close the business. There are multiple tasks and documents to be filed to voluntarily dissolve a Minnesota corporation. Below is a step-by-step guide to help you through the process of winding up your corporation with the Minnesota Secretary of State and under Minnesota law:

Authorization from the Corporation

  • If the corporation has not issued shares then the following process is used:
    • A majority of the incorporators or directors shall sign articles of dissolution containing:
      • The name of the corporation,
      • The date of the incorporation,
      • A statement that shares have not been issued,
      • A statement that all consideration received from subscribers for shares issued, less expenses incurred in the organization of the corporation, has been returned to the subscribers, and
      • A statement that no debts remain unpaid.
    • The articles of dissolution must then be filed with the Secretary of State

See Minn. Stat. § 302A.711.

  • If the corporation has issued shares which remain outstanding, then the following process can be used:
    • Written notice is given to each shareholder, whether not entitled to vote at a meeting of shareholders, within the time and in the manner provided in Minn. Stat. § 302A.435 for notice of meetings of shareholders, and whether the meeting is a regular or a special meeting, shall state that a purpose of the meeting is to consider dissolving the corporation, and
    • The proposed dissolution shall be submitted for approval at a meeting of shareholders.
    • See Stat. § 302A.721, subd. 2(a).
  • If the corporation has issued shares but none remain outstanding, then the following process can be used:
    • The directors may authorize and commence the dissolution.
    • See Stat. § 302A.721, subd. 2(b).
  • Written Action in lieu of a meeting as contemplated in Minn. Stat. § 302A.72:1
    • An action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting by written action if signed, or consented to by authenticated electronic communication, by all of the shareholders entitled to vote on that action. But, in no event may written action be taken by holders of less than a majority of the voting power of all shares entitled to vote on that action.
    • See Stat. § 302A.441, subd. 1.

 Notice

  • Notice of Intent to Dissolve:
    • Once the dissolution of the corporation is approved, the corporation shall file with the secretary of state a notice of intent to dissolve.
    • The Notice of Intent to Dissolve shall include:
      • The name of the corporation,
      • The date and place of the meeting at which the resolution was approved, and
      • A statement that the requisite vote of the shareholders was received, or that the requisite shareholders entitled to vote signed a written action.
    • File the Notice of Intent with the Secretary of State.
    • See Stat. § 302A.723.
  • Notice to creditors:
    • 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 count or counties where the registered office and the principal executive office of the corporation are located and by giving written notice to creditors and claimants pursuant to Minn. Stat. § 302A.011, subd. 17.
    • The notice to creditors and claimants shall have the following information:
      • A statement that the corporation is in the process of dissolving,
      • A statement that the corporation has filed with the Secretary of State a notice of intent to dissolve,
      • The date of filing the notice of intent to dissolve,
      • The address of the office to which written claims against the corporation must be presented;
      • And the date by which all claims must be received (the later of 90 days after published notice, or 90 days after the date on which written notice was given to a specific creditor).
      • See Stat. § 302A.727, subd. 11-2.
  • Winding up and Liquidation
    • After Notice of Intent, the corporation must cease operation of business. The only continuing activity of the corporation should be that necessary to wind up its affairs and distribute its assets in liquidation.
    • Assemble Assets to be sold or otherwise disposed of.
    • Satisfy obligations and liabilities by providing payment for all corporate obligations and liabilities and all claims against the corporation.
    • Distribution of assets to remaining shareholders.
    • Collect and cancel stock certificates of the corporation.

Filings with the Secretary of State

  • Notice of Intent (see above)
  • Articles of Dissolution for Corporations that gave notice to creditors:
    • Must contain:
      • The last date on which the notice was given and (1) that the payment of all creditors and claimants filing a claim within the 90-day period in Minn. Stat. § 302A.727, subd. 2(e), has been made or provided for, or (2) the date on which the longest of the periods described in Minn. Stat. § 302A.727, subd. 2(b) expired.
      • That the remaining property, assets, and claims of the corporation have been distributed among its shareholders in accordance with Minn. Stat. § 302A.551, subd. 4, or that adequate provision has been made for that distribution, and
      • There are no pending legal, administrative, or arbitration proceedings by or against the corporation or that adequate provision has been made for the satisfaction of any judgment.
      • See Stat. § 302A.727, subd. 5.
    • Filed with the Secretary of State after:
      • The 90-day period in Minn. Stat. § 302A.727, subd 2(e) has expired and the payment of claims of all creditors and claimants filing a claim within that period has been made or provide for, or
      • The longest of the periods described in § Minn. Stat. § 302A.727 has expired and there are no pending legal, administration, or arbitration proceedings by or against the corporation.
      • See Stat. § 302A.727, subd. 4.
  • Articles of Dissolution for Corporations that did not give notice to creditors:
    • Must contain:
      • If the it is being filed under the notion that all creditors have been paid, then a statement to that effect acknowledging all debts have been paid,
      • Remaining property and assets have been distributed among the shareholders, and
      • There is no pending legal action.
    • When filed:
      • The payment of claims of all known creditors and claimants has been made, or
      • At least two years have elapsed from the date of filing the notice of intent to dissolve.

Obtain Certificate of Dissolution from the Secretary of State

 

 

This article was written by attorney Maureen A. Carlson.