Dissolution is the formal end of a company when the startup cannot be saved and must stop operating. The aim is to wind up responsibly, not simply abandon the business. section 30.0 section 30.3.7
A practical windup has three central goals:
- Sell or otherwise resolve the company’s assets. section 30.2
- Pay creditors as fully as available cash allows, often negotiating reduced settlements when full payment is impossible. section 30.2
- File formal dissolution papers after the board authorizes the shutdown and the remaining relationships, documents, assets, and debts are handled. section 30.3 section 30.3.7
A painful shutdown can still create a next step
After FactPoint shut down, its founder retained a CFO and hired attorneys experienced in bankruptcies and liquidations. They handled employee paperwork, contacted customers, sold furniture and computers, and marketed potentially valuable patents. One patent package became the foundation of a new startup. The lesson is practical: finish the windup carefully, because useful assets and future opportunities may still be hidden inside a failed company. section 30.3.7
Dissolution becomes complete when the papers are filed with the secretary of state where the company is registered. At that point, the company no longer exists. section 30.3.7
