The following is a general guide to dissolving a corporation under the South Carolina Business Corporation Act of 1988, as amended.
The shareholders and directors of the corporation approve its dissolution and winding up in a meeting or by unanimous written consent.
Articles of Dissolution; Status of Dissolved Corporation
Articles of dissolution are filed with the South Carolina Secretary of State.
A dissolved corporation continues its corporate existence as necessary to wind up its business. These activities usually include (1) collecting receivables and other assets; (2) selling assets that will not be distributed to its shareholders; (3) paying liabilities; and (4) distributing its remaining assets among its shareholders.
Notification to Creditors
- Known Claims. The corporation must provide written notice of its dissolution to each of its known claimants. The notification must explain the statutory procedure by which their claims must be made. Known claims are usually barred if they are not submitted within 120 days of the notice.
- Unknown Claims. The corporation should publish notice of its dissolution in a newspaper of general circulation in the county where its principal office is or was last located. The notice must explain the statutory procedure by which unknown claims must be made. Unknown claims are usually barred if they are not submitted within 5 years of the notice.
Handling Creditor Claims and Establishing a Reserve
The corporation should review the claims it receives and determine whether or not the claims should be accepted and paid. Claimants must be notified of the determination. The corporation may also establish a reserve fund to handle anticipated unknown claims.
Distribution of Assets to Shareholders
After handling its creditor claims and establishing any necessary reserve fund, the remaining assets must be distributed to the corporation's shareholders in accordance with their ownership interests.
Shareholders remain liable for their pro rata share of (1) known claims of persons who did not properly receive notice of the corporation's dissolution and (2) claims that are contingent or based on an event occurring after the effective date of the dissolution.
Other Winding Up Activities
After distributing its assets, the corporation should (1) close its bank accounts; (2) file its final tax returns; and (3) terminate any licenses or permits as necessary.
This document is intended to provide general information about legal and business issues. It should not be construed as legal advice or as an advertisement for legal services.