A corporation has a perpetual existence. It continues to exist and incur obligations unless an authorized person officially dissolves it by filing paperwork with the same government office that authorized its formation. Simply closing the corporation's doors and ceasing operations is not sufficient to dissolve a corporation in Kentucky. Corporations organized under Kentucky law have two options for dissolution that depend on whether the corporation has or has not commenced business activities. In both instances, an authorized party must file articles of dissolution with the secretary of state and follow the winding up procedures for corporations that are outlined in the Kentucky Revised Statutes.
Dissolving an Operational Corporation
Call a meeting of the board of directors. Vote to present a proposal to shareholders to dissolve the corporation. The vote must pass by a majority. Record the vote in the meeting minutes. Archive the minutes in the corporate records.
Send notice in writing to all shareholders of a meeting to vote on the dissolution of the corporation. Hold the meeting and take the vote. The vote must pass by a majority, unless a different percentage is required for a dissolution vote by the corporation's articles of incorporation or bylaws. Record the vote in the meeting minutes. Draft a corporate resolution authorizing the board to file articles of dissolution and wind up the company's affairs. Archive the meeting minutes and corporate resolution in the corporate records.
Download an articles of dissolution form from the "business entity changes" section of the Kentucky secretary of state website. Use the version that applies to a dissolution by the board of directors or shareholders of a corporation.
Fill out the form. The form requires you to indicate the results of the shareholder vote authorizing dissolution, including the percentage of votes for and against.
File articles of dissolution and three copies with the Kentucky secretary of state's office, along with the appropriate fee. The fee at the time of publication is $40. The corporation is officially dissolved as of the date indicated on the articles.
Wind up the affairs of the corporation. Liquidate all assets. Pay all outstanding debts. Close all accounts. Notify all known creditors in writing that they have at least 120 days to make a claim on the corporation's assets. State the exact deadline and indicate where claims should be sent. State in the letter that any claim that is not received by the deadline is forever barred.
Make provisions for unknown creditors and contingent liabilities. Publish a notice in a newspaper of general circulation in the county where the corporation is located that states that the corporation has been dissolved. State that all unknown creditors are barred from bringing a claim against the corporation unless the claim is presented within two years of the date of the notice. Indicate where claims should be mailed. Set aside money to pay anything that you suspect might become an issue; for example, set aside money if a customer has threatened a lawsuit.
Distribute the remaining assets of the corporation to shareholders in proportion to their ownership interests. As long as the corporation paid its bills, provided written notice to known creditors and published information for unknown creditors, the shareholders will be liable only for corporate debts arising after dissolution for a maximum of two years and to the extent that they received an asset distribution.
Dissolving a Corporation That Has Not Commenced Business
Download an articles of dissolution by incorporators and initial directors form from the "business entity changes" section of the Kentucky secretary of state website. This form is specifically for businesses that have not commenced operations. The dissolution must be approved by a majority of the existing incorporators or initial directors.
Fill out the form. The form requests the name of the corporation, the date of incorporation and a statement that the corporation either has not issued shares or has not commenced business. You must also state that no business debts remain unpaid and any assets have been distributed to shareholders. Sign the form.
File the original articles of dissolution and three copies with the Kentucky secretary of state's office according to the form's instructions. Include the appropriate filing fee as specified. The filing fee at the time of publication is $40.