Business Startup

What You Should Know About Voluntary, Administrative, and Judicial Dissolution of a Business Entity

As a business owner, you may find yourself in a situation where you either need to dissolve your company, you are being forced to dissolve your company (either by other owners or by the state), or you simply want to know what your potential exits are. This post will explain dissolution in Washington, and how it can affect your business.

In Washington, closely-held corporations may be dissolved in one of three ways: 1) voluntarily, by vote of the shareholders or directors; 2) by administrative dissolution; or 3) by judicial dissolution.

Voluntary Dissolution

To voluntarily dissolve a corporation, generally the corporation’s board of directors may propose dissolution for submission to a vote of the shareholders. Two-thirds of the authorized shareholders then must approve the proposed dissolution....

Read More

Business Startup

LLC Operating Agreement series: Exit Strategies and Provisions

Aside from choosing what entity to form your business as, one of the most important considerations in the early stages of forming a company is the exit strategy. Ironic as it may sound, deciding how to get out of the business in the beginning can save you and your business partners time and money down the road. As we’ve discussed throughout our series on LLC Operating Agreements, there’s tons of flexibility when deciding what provisions to include in your operating agreement. It’s no different when deciding on exit strategies, restrictions, and procedures for your LLC. Some operating agreements are silent on this point, while others include extensive restrictions and procedures for getting out of the company. Today’s post will detail some of...

Read More

Business Startup

Personal Liability for corporate transactions after dissolution

In a recent Court of Appeals decision*, the honorable judge Laurel Siddoway reiterated the Supreme Court’s stance on applying the theory of promoter liability to post-dissolution corporate acts. This means, for purposes of individual liability, any acts occurring on behalf of the corporation after dissolution, whether voluntary or involuntary, must be made solely for the purposes of winding up the corporate affairs and business. A corporation’s key personnel may be held personally liable if they carry on any business that is not necessary to wind up and liquidate its business.

In Equipto Division Aurora Equipment Co. v. Yarmouth, the Supreme Court determined that RCW 23B.02.040 of the Washington Business Corporation Act applies to both prior corporation acts and post-dissolution transactions that...

Read More

146 N Canal Street, Suite 350   |   team@invigorlaw.com