By definition, the term dissolution is the act or process of ending an official organization or legal agreement. Corporate dissolution typically is done through either voluntarily dissolution or involuntarily dissolution. Involuntary dissolution is enforced by state regulations for not paying corporate taxes or some other action of the government, ending in suspension. A voluntary dissolution usually happens when the directors or managers decide the company has served its purpose and won’t continue transacting business. It may also occur if the members can’t decide on the future of the company and want to head in different directions or in the case of bankruptcy. At the end, the result is ceasing all operations and the disposal of all assets within its members or shareholders.

For a Corporation, this process involves a meeting of the board of directors and shareholders and following the respective local laws and the articles of incorporation. The entity must then comply with State and Federal regulations and satisfy the required filings and fees. But this can only be achieved once the corporation has paid all due taxes, court settlements or other pending liabilities. The company must also notify the IRS of the intended company dissolution. Finally, the corporation must dissolve all assets, close accounts, cancel licenses or permits and pay any creditors.