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USA Statutes : arizona
Title : Corporations and Associations
Chapter : DISSOLUTION-NONPROFIT CORPORATIONS
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10-11401 Dissolution by incorporators or directors and third persons
A. A majority of the incorporators or initial directors of a corporation that has
not commenced activities or the board of directors of a corporation that has no members
or has no members entitled to vote on dissolution or that has not commenced activities
may dissolve the corporation by delivering to the commission for filing articles of
dissolution. An incorporator or a director, whose signature shall be acknowledged, shall
execute the articles of dissolution, and the articles shall set forth all of the
following:
1. The name of the corporation.
2. The date of its incorporation.
3. Either:
(a) That the corporation has no members.
(b) That the corporation has no members entitled to vote on dissolution.
(c) That the corporation has not commenced activities.
4. That the dissolution was duly authorized by act of the board of directors or a
majority of the incorporators or initial directors and, if required by section 10-11030,
act of any other persons.
B. The board of directors, incorporators or initial directors in approving the
dissolution shall adopt a plan of dissolution indicating to whom the assets owned or held
by the corporation will be distributed after all creditors have been paid.
C. Authorization of dissolution pursuant to this section shall require the approval
in writing by any person or persons whose approval is required for dissolution.
10-11402 Dissolution by directors and third persons
A. If the members of the corporation are entitled to vote on dissolution, a
corporation's board of directors may propose dissolution for submission to the members.
B. For a proposal to dissolve to be adopted all of the following shall have
occurred:
1. The board of directors shall recommend dissolution to the members, unless the
board of directors determines that because of conflict of interest or other special
circumstances it should make no recommendation and communicates the basis for its
determination to the members.
2. The members entitled to vote shall approve the proposal to dissolve as provided
in subsection E or F of this section.
3. Each person whose approval is required by the articles of incorporation for
dissolution shall approve the plan in writing.
C. The board of directors may condition its submission of the proposal for
dissolution on any basis.
D. The corporation shall notify each member of the proposed membership meeting in
accordance with section 10-3705. The notice shall also state that the purpose or one of
the purposes of the meeting is to consider dissolving the corporation and shall contain
or be accompanied by a copy or summary of the plan of dissolution.
E. Unless the articles of incorporation or the board of directors acting pursuant
to subsection C of this section requires a greater vote or voting by class, in order to
adopt the proposal to dissolve a majority of the votes cast or a majority of the voting
power, whichever is less, shall approve the proposal to dissolve.
F. If the board of directors submits the dissolution for member action by written
consent or written ballot, the material soliciting the approval shall contain or be
accompanied by a copy or summary of the plan of dissolution.
G. The plan of dissolution shall indicate to whom the assets owned or held by the
corporation will be distributed after all creditors have been paid.
10-11403 Articles of dissolution
A. At any time after dissolution is authorized, the corporation may dissolve by
delivering to the commission articles of dissolution setting forth all of the following:
1. The name of the corporation.
2. The date dissolution was authorized.
3. A statement that the dissolution was duly authorized by an act of the members or
an act of the board of directors and, if applicable, with the approval required pursuant
to section 10-11402.
B. A corporation is dissolved on the effective date of its articles of dissolution.
C. The articles of dissolution shall not be considered complete until all fees,
penalties and costs required to be paid under this title have been paid.
D. Within sixty days after the filing a copy of the articles of dissolution shall
be published. An affidavit evidencing the publication shall be filed with the commission
within ninety days after filing the articles of dissolution.
E. The articles of dissolution are not complete until the commission has received a
notice from the department of revenue that the tax levied under title 42, chapter 5,
article 1 against the corporation has been paid, or until the department of revenue
notifies the commission that the corporation is not subject to the tax and the commission
has received from the department of revenue a certificate issued by the department of
revenue pursuant to section 43-1151.
10-11404 Revocation of dissolution
A. A corporation may revoke its dissolution within one hundred twenty days of its
effective date.
B. Revocation of dissolution shall be authorized in the same manner as the
dissolution was authorized unless that authorization permitted revocation by action of
the board of directors alone, in which event the board of directors may revoke the
dissolution without action by the members or any other person.
C. After the revocation of dissolution is authorized, the corporation may revoke
the dissolution by delivering to the commission for filing articles of revocation of
dissolution, together with a copy of its articles of dissolution, that set forth all of
the following:
1. The name of the corporation.
2. The effective date of the dissolution that was revoked.
3. The date that the revocation of dissolution was authorized.
4. If the corporation's board of directors, or its incorporators or initial
directors, revoked the dissolution a statement to that effect.
5. If the corporation's board of directors revoked a dissolution authorized by the
members alone or in conjunction with another person or persons, a statement that
revocation was permitted by action by the board of directors alone pursuant to that
authorization.
6. If member or third person action was required to revoke the dissolution, a
statement that revocation was permitted by act of the members and act of each third
person, as applicable.
D. Revocation of dissolution is effective on the effective date of the articles of
revocation of dissolution.
E. When the revocation of dissolution is effective, it relates back to and takes
effect as of the effective date of the dissolution and the corporation resumes carrying
on its activities as if dissolution had never occurred.
10-11405 Effect of dissolution
A. A dissolved corporation continues its corporate existence but shall not carry on
any activities except that activity appropriate to wind up and liquidate its affairs,
including:
1. Preserving and protecting its assets and minimizing its liabilities.
2. Discharging or making provision for discharging its liabilities and obligations.
3. Disposing of its properties that will not be distributed in kind.
4. Returning, transferring or conveying assets held by the corporation on a
condition requiring return, transfer or conveyance, which condition occurs by reason of
the dissolution, in accordance with such condition.
5. Transferring, subject to any contractual or legal requirements, its assets as
provided in or authorized by its articles of incorporation or bylaws.
6. If no provision has been made in its articles of incorporation or bylaws for
distribution of assets on dissolution and the corporation is organized for charitable,
religious, eleemosynary, benevolent, educational or similar purposes, to one or more
domestic or foreign corporations, societies or organizations engaged in activities
substantially similar to those of the dissolving corporation.
7. If no provision has been made in its articles of incorporation or bylaws for
distribution of assets on dissolution, transferring its assets to its members or, if it
has no members, to those persons whom the corporation holds itself out as benefitting or
serving.
8. Doing every other act necessary to wind up and liquidate its assets and affairs.
B. Dissolution of a corporation does not:
1. Transfer title to the corporation's property.
2. Subject its directors or officers to standards of conduct that are different
from those prescribed in chapter 31 of this title.
3. Change quorum or voting requirements for its board of directors or members,
change provisions for selection, resignation or removal of its directors or officers, or
both, or change provisions for amending its bylaws.
4. Prevent commencement of a proceeding by or against the corporation in its
corporate name or any officers, directors or members or affect applicable statutes of
limitations.
5. Abate or suspend a proceeding pending by or against the corporation or any
officers, directors or members on the effective date of dissolution.
6. Terminate the authority of the statutory agent of the corporation.
10-11406 Known claims against dissolved corporation
A. A dissolved corporation may dispose of the known claims against it by following
the procedure described in this section.
B. The dissolved corporation shall notify its known claimants in writing of the
dissolution at any time and from time to time after its effective date. The written
notice shall:
1. Describe information that shall be included in a claim.
2. Provide a mailing address where a claim may be sent.
3. State the deadline, which may not be fewer than one hundred twenty days from the
effective date of the written notice, by which the dissolved corporation must receive the
claim.
4. State that the claim will be barred if not received by the deadline.
C. A claim against the dissolved corporation is barred either:
1. If a claimant who was given written notice under subsection B of this section
does not deliver the claim to the dissolved corporation by the deadline.
2. If a claimant whose claim was rejected by the dissolved corporation does not
commence a proceeding to enforce the claim within ninety days from the effective date of
the rejection notice.
D. For purposes of this section, claim does not include a contingent
claim. Notwithstanding the foregoing, a claim that is contingent as of the effective
date of dissolution but later ripens into a known claim or a claim based on an event
occurring after the effective date of dissolution may be disposed of at such later time
by the dissolved corporation by following the procedures described in subsections B and
C.
10-11407 Unknown claims against dissolved corporation
A. A dissolved corporation may also publish notice of its dissolution and request
that persons with claims against the corporation present them in accordance with the
notice.
B. The notice shall:
1. Be published one time in a newspaper of general circulation in the county where
the dissolved corporation's known place of business is or was last located.
2. Describe the information that must be included in a claim and provide a mailing
address where the claim may be sent.
3. State that a claim against the corporation will be barred unless a proceeding to
enforce the claim is commenced within five years after the publication of the notice.
C. If the dissolved corporation publishes a newspaper notice in accordance with
subsection B of this section, the claim of each of the following claimants is barred
unless the claimant commences a proceeding to enforce the claim against the dissolved
corporation within five years after the publication date of the newspaper notice:
1. A claimant who did not receive written notice under section 10-11406.
2. A claimant whose claim was timely sent to the dissolved corporation but not
acted on.
3. A claimant whose claim is contingent or based on an event occurring after the
effective date of dissolution and is not disposed of in accordance with section 10-11406,
subsection D.
D. If a claim, including a contingent claim or a claim based on an event occurring
after the effective date of dissolution, is not barred by section 10-11406 or this
section, the claim may be enforced either:
1. Against the dissolved corporation to the extent of its undistributed assets.
2. If the assets have been distributed in liquidation, against any person, other
than a creditor of the corporation, to whom the corporation distributed its property to
the extent of the distributee's pro rata share of the claim or the corporate assets
distributed to that person in liquidation, whichever is less, but the distributee's total
liability for all claims under this section shall not exceed the total amount of assets
distributed to the distributee.
10-11420 Grounds for administrative dissolution
The commission may commence a proceeding under section 10-11421 to administratively
dissolve a corporation if either:
1. The corporation does not pay within sixty days after they are due any fees or
penalties imposed by chapters 24 through 40 of this title.
2. The corporation does not deliver its annual report to the commission within
sixty days after it is due.
3. The corporation is without a statutory agent or known place of business in this
state.
4. The corporation does not notify the commission within sixty days that its
statutory agent or known place of business has been changed, that its statutory agent has
resigned or that its known place of business has been discontinued.
5. The corporation has failed to make any publication required by this title and
file an affidavit of publication within the time prescribed by this title, provided the
commission has notified the corporation of the intent of the commission to commence a
dissolution proceeding for that reason and the corporation has failed to file an
affidavit of publication within sixty days after that notice.
6. The corporation's period of duration stated in its articles of incorporation
expires.
7. The corporation has failed to comply with section 10-3202, subsection F.
8. Any officer or other representative of the corporation has made any
misrepresentation of a material matter in any application, report, affidavit or other
document submitted by the corporation pursuant to chapters 24 through 40 of this title.
9. The commission has not received the notice required by section 10-11403,
subsection E within six months after filing articles of dissolution.
10. The corporation has failed to file a certificate of disclosure or answer
interrogatories as prescribed in chapters 24 through 40 of this title.
11. The corporation failed to comply with section 10-11623, subsection A.
10-11421 Procedure for and effect of administrative dissolution
A. If the commission determines that one or more grounds exist under section
10-11420 for dissolving a corporation, it shall serve the corporation with written notice
of its determination under section 10-3504.
B. If the corporation does not correct each ground for dissolution or demonstrate
to the reasonable satisfaction of the commission that each ground determined by the
commission does not exist within sixty days after service of the notice is perfected
under section 10-3504, the commission shall administratively dissolve the corporation by
signing a certificate of dissolution that recites the ground or grounds for dissolution
and its effective date. The commission shall file the original of the certificate and
serve a copy on the corporation under section 10-3504.
C. Subject to the provisions of section 10-11422 regarding reinstatement, a
corporation administratively dissolved continues its corporate existence but may not
carry on any activities except those necessary to wind up and liquidate its affairs under
section 10-11405 and notify its claimants under sections 10-11406 and 10-11407. If the
corporation has not applied for reinstatement within six months after the effective date
of the dissolution, the commission shall release the corporate name for use in accordance
with chapters 24 through 40 of this title or by a person intending to register the name
as a trade name pursuant to title 44, chapter 10, article 3.1.
D. The administrative dissolution of a corporation does not terminate the authority
of its statutory agent.
10-11422 Reinstatement following administrative dissolution
A. A corporation administratively dissolved under section 10-11421 may apply to the
commission for reinstatement within three years after the effective date of
dissolution. The application shall both:
1. Recite the name of the corporation and the effective date of its administrative
dissolution.
2. State that the ground or grounds for dissolution either did not exist or have
been eliminated.
B. If the commission determines that the application contains the information
required by subsection A of this section and that the information is correct, it shall
cancel the certificate of dissolution and prepare a certificate of reinstatement that
recites this determination and the effective date of reinstatement, file the original of
the certificate and shall serve a copy on the corporation under section 10-3504.
C. When reinstatement is effective, it relates back to and takes effect as of the
effective date of the administrative dissolution and the corporation shall resume
carrying on its activities as if the administrative dissolution had never occurred.
D. If another corporation has adopted the name of the corporation or another person
has adopted the name of the corporation as a trade name, the application shall be
accompanied by articles of amendment that are in accordance with chapter 33, article 1 of
this title and that adopt a new name for the corporation that complies with chapter 27,
article 1 of this title.
10-11430 Grounds for judicial dissolution
A. The court may dissolve a corporation in a proceeding by the attorney general if
it is established that either:
1. The corporation obtained its articles of incorporation through fraud.
2. The corporation has continued to exceed or abuse the authority conferred upon it
by law.
B. Except as provided in the articles of incorporation or bylaws of a corporation
organized primarily for religious purposes, the court may dissolve a corporation in a
proceeding by fifty members or by members holding twenty-five per cent of the voting
power, whichever is less, or by a director or any person specified in the articles of
incorporation, if any of the following is established:
1. The directors are deadlocked in the management of the corporate affairs, the
members, if any, are unable to breach the deadlock and irreparable injury to the
corporation is threatened or being suffered or the affairs of the corporation cannot be
conducted generally because of the deadlock.
2. The directors or those in control of the corporation have acted, are acting or
will act in a manner that is illegal, oppressive or fraudulent.
3. The members are deadlocked in voting power and have failed, for a period that
includes at least two consecutive annual meeting dates to elect successors to directors
whose terms have or would otherwise have expired.
4. The corporate assets are being wasted, misapplied or diverted for noncorporate
purposes.
C. The court may dissolve a corporation in a proceeding by a creditor if it is
established that either:
1. The creditor's claim has been reduced to a judgment, the execution on the
judgment has been returned unsatisfied and the corporation is insolvent.
2. The corporation has admitted in writing that the creditor's claim is due and
owing and the corporation is insolvent.
D. The court may dissolve a corporation in a proceeding by the corporation to have
its voluntary dissolution continued under court supervision.
10-11431 Procedure for judicial dissolution
A. Venue for a proceeding by the attorney general to dissolve a corporation or for
a proceeding brought by any other party named in section 10-11430 is in the county where
a corporation's known place of business is or was last located.
B. It is not necessary to make directors or members parties to a proceeding to
dissolve a corporation unless relief is sought against them personally.
C. A court in a proceeding brought to dissolve a corporation may issue injunctions,
appoint a receiver with all powers and duties the court directs, take other action
required to preserve the corporate assets wherever located and carry on the activities of
the corporation until a full hearing can be held.
10-11432 Receivership
A. A court in a judicial proceeding brought to dissolve a corporation may appoint
one or more receivers to wind up and liquidate or manage the affairs of the
corporation. After notifying all parties to the proceeding and any interested persons
designated by the court, the court shall hold a hearing before appointing a
receiver. The court appointing a receiver has exclusive jurisdiction over the
corporation and all of its property wherever located.
B. The court may appoint an individual or a domestic or foreign business or
nonprofit corporation authorized to transact business in this state as a receiver. The
court may require the receiver to post bond, with or without sureties in an amount the
court directs.
C. The court shall describe the powers and duties of the receiver in its appointing
order, which may be amended from time to time. Among other powers, the receiver may
exercise all of the powers of the corporation, through or in place of its board of
directors, executive committee or officers, to the extent necessary to carry on the
ordinary and necessary activities of the corporation and to manage the affairs of the
corporation in the best interests of its members and creditors.
D. The court from time to time during the receivership may order compensation paid
and expense disbursements or reimbursements made to the receiver and its counsel from the
assets of the corporation or proceeds from the sale of the assets.
E. A receiver of a corporation may sue and defend in all courts in his own name as
receiver of such corporation.
10-11433 Decree of dissolution
A. If after a hearing the court determines that one or more of the grounds for
judicial dissolution described in section 10-11430 exist, it may enter a decree that
dissolves the corporation and specifies the effective date. The clerk of the court shall
deliver a certified copy of the dissolution decree to the commission which shall file it.
B. After entering the decree of dissolution, the court shall direct the winding up
and liquidation of the corporation's affairs in accordance with section 10-11405 and the
notification of claimants in accordance with sections 10-11406 and 10-11407.
10-11440 Deposit with department of revenue
A. Assets of a dissolved corporation that should be transferred to a creditor,
claimant or member of the corporation who cannot be found or who is not competent to
receive them and does not have a legal representative who is legally competent to receive
them shall be reduced to cash subject to known trust restrictions and deposited with the
unclaimed property division of the department of revenue for safekeeping.
B. Notwithstanding subsection A, in the discretion of the unclaimed property
division of the department of revenue property may be received and held in kind.
C. If the creditor, claimant, member or legal representative who is legally
competent to receive the distributive portion furnishes satisfactory proof of entitlement
to the amount deposited or property held in kind, the unclaimed property division of the
department of revenue shall pay the creditor, member or legal representative that amount
or property.
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