Memphis Corporate Dissolution Attorney
Nothing lasts forever. This includes businesses and corporations that at some point in time will, for whatever reason, decide to cease its operations. When this occurs, the business, before it can completely dissolve, will be required to go through a period of “winding up.” This process involves a number of legal steps necessary to “tidy its affairs” and handle the disposition of any assets and/or debts that might remain.
There are certain rules and procedures of which a corporation will need to comply during the “wind up” process. Corporate employees and directors who do not dissolve the business in accordance with these rules and procedures may find themselves facing a litany of legal issues. That is why it is critical to contact the seasoned team of Tennessee corporate dissolution attorneys at Douglass & Runger, Attorneys at Law, who will help to ensure that your business follows all of the legal steps necessary to successfully wind up your business.
How is Winding Up Supposed to Work?
Once a business has decided to wind up and cease all operations, it is generally not permitted to taking on any additional liabilities except those that are necessary for winding up the business’s affairs. The assets of the corporation are supposed to be collected and identified along with the liabilities and obligations of the corporation. These assets are then used to pay the debts and liabilities of the corporation so as to satisfy its creditors. Any remaining assets of the corporation are then distributed to the corporation’s owners – its shareholders.
At all times during the winding up process any employee or director involved is to continue acting in the interest of the business. A manager or director, for example, is not permitted to take advantage of his or her position during this time at the expense of the company nor are they permitted to bind the corporation to new liabilities and obligations.
What Potential Issues Can Occur During Winding Up?
Disputes and legal conflicts can arise during the winding up process. These disputes are most often connected to the obligations that managers and directors have toward the business as it winds up. Common disputes involve: