0

I am a minor shareholder (control less than 20% of the shares) at a startup that never did any business. It is a C-Corp incorporated in New York under my name. Right now I want to dissolve the corporation, but I cannot locate one of the stakeholders who controls a significant part of the corporation.

I then read an article on smallbusiness.chron.com which I cannot find anymore. The article suggests that dissolving the corporation only requires to form a majority to vote on dissolution. However, according to the New York State Certificate of Dissolution, dissolution can only be done after one of the following conditions is met:

  • The dissolution was authorized at a meeting of shareholders by two-thirds of the votes of all outstanding shares entitled to vote.
  • The dissolution was authorized at a meeting of shareholders by a majority of the votes of all outstanding shares entitled to vote.
  • The dissolution was authorized by the unanimous written consent of the holders of all outstanding shares entitled to vote without a meeting.

To my understanding, that implies that I have to have a meeting with all of the shareholders, which is difficult since the difference in geographical locations. Also the corporation has some unallocated shares. So can I still simply form a majority to dissolve the corporation?

Improve this question
5
  • 1
    NY law allows board meetings to be carried out through teleconference facilities. The same may be true of shareholder meetings.
    – phoog
    Nov 5 '17 at 18:09
  • @phoog Any reference?
    – Dylan Czenski
    Nov 5 '17 at 20:59
  • I don't have it handy but I can look it up tomorrow.
    – phoog
    Nov 5 '17 at 21:42
  • Usually, the corporation will be administratively dissolved if it does not maintain its regular corporate reports to the Secretary of State and pay the fees associated with that. Also, note that, until dissolved, a federal tax return must be filed each year.
    – ohwilleke
    Nov 6 '17 at 15:50
  • It's at Business Corporation Law section 708, Action by the Board. It authorizes participation by conference call "unless otherwise restricted by the certificate of incorporation or the by-laws." That section is part of Article 7, Directors and Officers. I did not see similar language in Article 6, Shareholders, but I didn't look very thoroughly.
    – phoog
    Nov 7 '17 at 15:09
-2

Your situation question requires legal analysis of the corporation, so for that reason, I would advise you to retain a dedicated corporate lawyer that would charge you a flat fee for this service. Your situation is simple and does not require a whole lot of attorney time.

In general, you can all do a meeting online using Skype, or WhatsApp or a similar service, to form a majority vote and sign the proper paperwork to dissolve the corporation. Flat fee attorney would charge an average of about $475.

Improve this answer
2
  • 1
    If you think that a question requires specific legal advise that is no properly answered in this forum, the proper process is to vote to close for that reason, not to provide an answer.
    – ohwilleke
    Nov 6 '17 at 15:48
  • Niij, how can I contact you?
    – SMS Attorneys LTD
    Nov 6 '17 at 19:52

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.