Dissolution clause: Copy, customize, and use instantly
Introduction
A dissolution clause outlines the procedures and conditions under which a business, partnership, or entity may be legally dissolved. It specifies how assets, liabilities, and other obligations will be handled upon termination, ensuring a clear process for closing down the business. This clause can also detail the rights of partners or shareholders in the event of dissolution and the steps for liquidating assets.
Below are templates for dissolution clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Voluntary dissolution of the company
This clause allows voluntary dissolution of the company.
The company may be dissolved by unanimous consent of the shareholders, provided that all debts and liabilities of the company have been settled. Upon dissolution, the company’s assets will be liquidated, and the proceeds will be distributed to shareholders in accordance with their ownership percentages.
Dissolution due to bankruptcy
This clause allows dissolution in the event of bankruptcy.
In the event the company becomes insolvent or files for bankruptcy, the company shall be dissolved, and a trustee will be appointed to liquidate the company’s assets. The trustee will pay off outstanding debts, and any remaining funds will be distributed to shareholders or partners according to their respective interests.
Dissolution upon mutual agreement
This clause allows dissolution upon mutual agreement.
The company may be dissolved upon mutual agreement between the shareholders or partners. Such dissolution must be formalized in writing, and the assets of the company will be liquidated to settle any existing liabilities. Any remaining assets will be distributed in accordance with the ownership interests of the parties involved.
Forced dissolution due to non-performance
This clause allows forced dissolution due to non-performance.
The company may be dissolved by a majority vote of the shareholders or partners if it is determined that the business is no longer operating in accordance with its objectives or if the company has failed to meet specific performance benchmarks as outlined in the Agreement. The dissolution process will include liquidating assets and settling liabilities.
Dissolution following a change in ownership
This clause allows dissolution following a change in ownership.
In the event that the ownership of the company changes, either by sale, transfer, or other means, the company may be dissolved if agreed upon by the majority of the shareholders. All outstanding debts and liabilities must be settled before dissolution, and any remaining assets will be distributed to the shareholders in proportion to their ownership stakes.
Dissolution upon completion of the business purpose
This clause allows dissolution once the business purpose is fulfilled.
The company shall be dissolved upon the completion of its business purpose, as specified in the company’s founding agreement or business plan. Once the purpose is fulfilled, any remaining assets will be liquidated and distributed to the shareholders or partners based on their respective shares.
Dissolution due to the death of a partner
This clause allows dissolution upon the death of a partner.
In the event of the death of a partner, the company shall be dissolved unless the remaining partners agree to continue the business. If the company is dissolved, the deceased partner’s estate will receive a fair share of the company’s assets after all liabilities and debts have been settled.
Dissolution for breach of agreement
This clause allows dissolution for breach of agreement.
If a partner or shareholder breaches any material term of this Agreement, the non-breaching party may initiate dissolution of the company. Upon dissolution, the assets of the company will be liquidated, and any outstanding debts will be settled before distribution to the partners or shareholders.
Voluntary liquidation upon dissolution
This clause governs voluntary liquidation after dissolution.
Upon dissolution of the company, a liquidator will be appointed to oversee the liquidation of the company’s assets. The liquidator will sell the company’s assets, pay off liabilities, and distribute any remaining funds to the shareholders or partners based on their respective ownership interests.
Dissolution and distribution of assets
This clause outlines asset distribution upon dissolution.
Upon the dissolution of the company, the assets will first be used to pay off all debts, liabilities, and expenses incurred during the operation of the business. Any remaining assets will then be distributed to the shareholders or partners in proportion to their ownership percentages or as specified in the dissolution agreement.
Dissolution by court order
This clause allows dissolution by court order.
The company may be dissolved by a court order if it is determined that dissolution is necessary for reasons such as fraud, mismanagement, or other legal violations. In such a case, a liquidator will be appointed by the court to manage the dissolution process, including the liquidation of assets and settlement of liabilities.
Conditional dissolution based on specific events
This clause allows conditional dissolution.
The company will be dissolved automatically if any of the following events occur: (a) the business is unable to meet financial obligations for a period of [X] consecutive months; (b) a majority of the shareholders vote for dissolution; or (c) any other condition specified in this Agreement is met. Upon dissolution, the company’s assets will be liquidated, and remaining funds will be distributed to shareholders.
Dissolution due to regulatory action
This clause allows dissolution due to regulatory action.
If the company is forced to cease operations due to government or regulatory action, the company shall be dissolved immediately. The assets of the company will be liquidated, and any remaining liabilities will be paid out before distribution to the shareholders or partners.
Dissolution due to inability to meet financial obligations
This clause allows dissolution due to financial inability.
If the company is unable to meet its financial obligations as they become due, the company may be dissolved upon the approval of [X]% of the shareholders or partners. The company will liquidate its assets, pay off debts, and distribute any remaining funds to the shareholders in accordance with their ownership interests.
Dissolution following a vote of no confidence
This clause allows dissolution following a vote of no confidence.
The company may be dissolved following a vote of no confidence by [X]% of the shareholders or partners. Upon dissolution, the company’s assets will be liquidated, and any liabilities will be settled. The remaining funds will be distributed in accordance with the ownership interests of the parties involved.
Automatic dissolution upon failure to maintain corporate status
This clause allows automatic dissolution if corporate status is lost.
If the company fails to maintain its corporate status with the appropriate regulatory authorities, including failure to file necessary documents or pay required fees, the company will be automatically dissolved. Any assets will be liquidated, and outstanding liabilities will be settled as part of the dissolution process.
Dissolution upon the sale of all company assets
This clause allows dissolution after asset sale.
In the event that all of the company’s assets are sold, the company will be dissolved immediately. The proceeds from the sale will first be used to satisfy any outstanding liabilities, and any remaining funds will be distributed to the shareholders in accordance with their ownership interests.
Dissolution for non-payment of dues
This clause allows dissolution for non-payment of dues.
If the company fails to pay its dues or obligations under this Agreement within [X] days of the due date, the other party may initiate dissolution proceedings. The company’s assets will be liquidated to settle any unpaid dues, and the remaining balance will be distributed according to ownership stakes.
Dissolution upon failure to secure funding
This clause allows dissolution if funding is not secured.
In the event the company fails to secure the necessary funding required to operate the business, the company may be dissolved. The management will liquidate the company’s assets, pay any outstanding debts, and distribute the remaining proceeds to the shareholders or partners.
Dissolution by shareholder decision
This clause allows dissolution by shareholder vote.
The company may be dissolved upon a vote of [X]% of the shareholders. Upon dissolution, the company will liquidate its assets, settle any liabilities, and distribute any remaining funds or property to the shareholders in proportion to their ownership interests.
Dissolution after fulfillment of business purpose
This clause allows dissolution after completing the business purpose.
The company will be dissolved once the business purpose, as outlined in the Articles of Incorporation or partnership agreement, has been fulfilled. All company assets will be liquidated, and any remaining debts will be settled. Any proceeds from the liquidation will be distributed to the shareholders.
Dissolution following the sale of a controlling interest
This clause allows dissolution if controlling interest is sold.
If a controlling interest in the company is sold to a third party, the company may be dissolved. The shareholders or partners will vote on the dissolution, and upon approval, the company’s assets will be liquidated, debts settled, and remaining funds distributed accordingly.
Dissolution due to a breach of fiduciary duty
This clause allows dissolution for breach of fiduciary duty.
If any partner or shareholder breaches their fiduciary duty, the company may be dissolved by the non-breaching party. Upon dissolution, the company will liquidate its assets and distribute the proceeds after settling liabilities and any legal claims arising from the breach.
Dissolution for failure to meet performance targets
This clause allows dissolution if performance targets are not met.
The company may be dissolved if it fails to meet performance targets set forth in the business plan. The management will liquidate the company’s assets, settle any outstanding obligations, and distribute the remaining funds to the shareholders according to their ownership interests.
Dissolution due to regulatory or legal challenges
This clause allows dissolution due to legal issues.
The company may be dissolved in the event of a regulatory or legal challenge that makes it impossible or impractical to continue operations. The company will liquidate its assets, pay any legal fees, and resolve outstanding claims before distributing any remaining funds to shareholders.
Dissolution following a change in tax status
This clause allows dissolution if the company’s tax status changes.
If the company’s tax status changes in such a way that continuing operations becomes financially untenable, the company may be dissolved. The company’s assets will be liquidated, and any outstanding liabilities will be settled before distribution of any remaining proceeds.
Dissolution upon failure to meet legal compliance
This clause allows dissolution for failure to comply with laws.
The company may be dissolved if it fails to comply with legal or regulatory requirements that prevent the continued operation of the business. Upon dissolution, the company’s assets will be liquidated, liabilities will be paid, and any remaining assets will be distributed among shareholders.
Dissolution due to loss of key management personnel
This clause allows dissolution if key management leaves.
If the company loses one or more key management personnel critical to its operations and is unable to replace them within [X] days, the company may be dissolved. The company will liquidate its assets, settle its debts, and distribute the remaining funds to shareholders in accordance with their ownership interests.
Dissolution for failure to achieve financial stability
This clause allows dissolution if the company is financially unstable.
The company may be dissolved if it is determined that the company is not financially stable and cannot meet its operational costs. The dissolution process will include liquidation of assets, settlement of debts, and distribution of any remaining funds to shareholders.
Dissolution upon unanimous shareholder agreement
This clause allows dissolution by unanimous agreement.
The company may be dissolved by unanimous agreement of all shareholders. Upon dissolution, the company will liquidate its assets, pay off any liabilities, and distribute the remaining proceeds to the shareholders according to their ownership stakes.
Dissolution due to an inability to attract new customers
This clause allows dissolution if the business fails to attract customers.
If the company fails to attract new customers or grow its customer base after [X] months, the company may be dissolved. All assets will be liquidated, debts settled, and the remaining funds will be distributed to the shareholders in proportion to their respective holdings.
Dissolution following a significant loss of business
This clause allows dissolution after a significant loss of business.
If the company experiences a significant loss of business, defined as a reduction of [X]% of its revenue over [Y] months, the company may be dissolved. The company will liquidate its assets, settle debts, and distribute the remaining proceeds to the shareholders or partners.
Dissolution following a material change in ownership structure
This clause allows dissolution after a material change in ownership.
The company may be dissolved if there is a material change in its ownership structure, such as the sale of more than [X]% of the company’s shares. The dissolution process will include liquidation of assets, settlement of liabilities, and distribution of remaining funds to the shareholders.
Dissolution upon failure to fulfill contractual obligations
This clause allows dissolution for non-fulfillment of contract obligations.
The company may be dissolved if it fails to fulfill its obligations under any significant contract or agreement that it has entered into. Upon dissolution, the company will liquidate its assets, pay off outstanding liabilities, and distribute any remaining funds to the shareholders in accordance with their ownership shares.
Dissolution due to insufficient profit generation
This clause allows dissolution for failure to generate profit.
If the company fails to generate a profit for [X] consecutive years, the company may be dissolved by a vote of the shareholders. Upon dissolution, the company’s assets will be liquidated, and any remaining debts will be settled before distributing any remaining funds.
Dissolution after the sale of all business assets
This clause allows dissolution after asset sale.
The company will be dissolved following the sale of all business assets. The proceeds from the sale will first be used to settle the company’s debts and obligations, and any remaining funds will be distributed to the shareholders or partners based on their ownership stakes.
Dissolution following the failure to renew necessary licenses
This clause allows dissolution if necessary licenses are not renewed.
If the company fails to renew or obtain necessary licenses or permits required for continued operations, the company may be dissolved. The company will liquidate its assets, settle any remaining debts, and distribute the proceeds to the shareholders according to their respective ownership percentages.
Dissolution upon a shareholder’s request
This clause allows dissolution upon a shareholder’s request.
A shareholder may initiate dissolution of the company by providing written notice to the other shareholders. Upon approval by [X]% of the shareholders, the company will proceed with dissolution, liquidating assets, settling liabilities, and distributing the remaining funds to the shareholders.
Dissolution after a prolonged cessation of business
This clause allows dissolution if the company stops business operations.
If the company ceases its business operations for a period of [X] consecutive months without reasonable cause, the company may be dissolved. Assets will be liquidated, debts will be settled, and any remaining funds will be distributed to the shareholders or partners.
Dissolution upon the end of a fixed term
This clause allows dissolution after a fixed period.
The company shall be dissolved at the end of the term outlined in this Agreement unless a renewal or extension is agreed upon by the shareholders. Upon dissolution, the company will liquidate its assets, pay off all liabilities, and distribute any remaining funds to the shareholders according to their ownership stakes.
Dissolution upon an unexpected event
This clause allows dissolution due to an unforeseen event.
In the event of an unforeseen circumstance or event beyond the control of the company, such as natural disasters, war, or other extreme conditions, the company may be dissolved. The management will liquidate assets, settle any outstanding liabilities, and distribute the remaining funds to the shareholders or partners.
Dissolution due to irreconcilable differences between partners
This clause allows dissolution if partners are in conflict.
If the partners are unable to reconcile differences that affect the company’s ability to operate, dissolution may be initiated by [X]% of the partners. Upon dissolution, the company’s assets will be liquidated, liabilities settled, and any remaining proceeds will be distributed to the partners based on their ownership interests.
Dissolution upon a unanimous board decision
This clause allows dissolution by a unanimous board decision.
The company may be dissolved if the Board of Directors unanimously agrees to the dissolution. Upon approval, the company will liquidate its assets, settle any debts or obligations, and distribute the remaining funds or property to the shareholders or partners.
Dissolution after a significant change in market conditions
This clause allows dissolution due to market changes.
If the company is unable to adapt to significant changes in market conditions, including technological changes or economic downturns, the company may be dissolved. After dissolution, the assets will be liquidated, and remaining liabilities will be paid off before any proceeds are distributed to shareholders.
Dissolution following a major loss or liability
This clause allows dissolution after significant loss.
If the company incurs a major financial loss or liability that exceeds [X] amount, the company may be dissolved. The assets will be liquidated to pay off debts, and any remaining funds will be distributed to shareholders or partners according to their ownership interests.
Dissolution due to failure of the business model
This clause allows dissolution if the business model fails.
If the company’s business model is deemed unsustainable or no longer viable, the company may be dissolved by agreement of [X]% of the shareholders. The company will liquidate its assets, settle any outstanding debts, and distribute any remaining funds to the shareholders.
Dissolution due to changes in law or regulations
This clause allows dissolution due to changes in law.
If changes in applicable laws or regulations make it impossible or impractical to continue the business, the company may be dissolved. The company will liquidate its assets, settle all liabilities, and distribute any remaining funds to the shareholders or partners.
Dissolution after the departure of a key shareholder
This clause allows dissolution after a key shareholder leaves.
In the event that a key shareholder exits the company, the company may be dissolved unless the remaining shareholders agree to continue the business. The assets will be liquidated, liabilities settled, and any remaining funds will be distributed according to ownership stakes.
Dissolution for non-payment of capital contributions
This clause allows dissolution due to non-payment of contributions.
If a shareholder or partner fails to meet their required capital contributions as outlined in this Agreement, the company may be dissolved. The non-contributing party will forfeit any ownership interest, and the company will liquidate its assets and distribute the remaining funds among the other parties in accordance with their ownership shares.
Dissolution after prolonged disputes
This clause allows dissolution after extended disputes.
If the shareholders or partners are in prolonged dispute regarding the company’s direction or operations, and these disputes cannot be resolved, the company may be dissolved by agreement of [X]% of the parties. The company will liquidate its assets, settle debts, and distribute any remaining proceeds.
Dissolution upon the decision of the sole shareholder
This clause allows dissolution by the sole shareholder.
If the company has a single shareholder, that shareholder may decide to dissolve the company at any time. Upon such a decision, the company will liquidate its assets, pay off any outstanding obligations, and distribute any remaining funds to the shareholder.
Dissolution due to the absence of operational funds
This clause allows dissolution for lack of operational funds.
If the company is unable to maintain sufficient funds to continue operations for a period of [X] months, it may be dissolved. The company will liquidate its assets, pay off outstanding debts, and distribute the remaining funds to the shareholders in accordance with their ownership interests.
Dissolution for failure to meet regulatory compliance
This clause allows dissolution for non-compliance with regulations.
If the company fails to meet required regulatory compliance standards, such as licensing or environmental regulations, the company may be dissolved. Upon dissolution, the company will liquidate its assets, pay off any remaining liabilities, and distribute any surplus funds to the shareholders or partners.
Dissolution upon a material adverse change
This clause allows dissolution for material adverse change.
In the event of a material adverse change in the financial health or business conditions of the company, as determined by the Board of Directors, the company may be dissolved. The company will liquidate assets, satisfy any debts, and distribute the remaining proceeds to shareholders according to their interests.
Dissolution following a failure to secure critical contracts
This clause allows dissolution if critical contracts are not secured.
If the company fails to secure any critical contracts necessary for its continued operation, the company may be dissolved. The company will liquidate its assets, pay off liabilities, and distribute the remaining funds to the shareholders or partners.
Dissolution upon the expiration of business agreement
This clause allows dissolution when a business agreement expires.
The company shall be dissolved upon the expiration of this Agreement unless otherwise extended by mutual agreement of the parties involved. Upon dissolution, the company will liquidate its assets, settle any outstanding liabilities, and distribute the remaining funds to the shareholders based on their ownership stakes.
Dissolution by vote of minority shareholders
This clause allows dissolution by a minority vote.
The company may be dissolved if [X]% of the minority shareholders vote in favor of dissolution. Following the vote, the company will liquidate its assets, pay any outstanding debts, and distribute the remaining funds to the shareholders according to their respective ownership interests.
Dissolution upon the termination of a key contract
This clause allows dissolution if a key contract is terminated.
If any key contract or agreement, critical to the company’s operations, is terminated or becomes void, the company may be dissolved. After dissolution, the company’s assets will be liquidated, liabilities settled, and any remaining funds distributed to shareholders based on their ownership percentages.
Dissolution due to underperformance in financial forecasts
This clause allows dissolution for failure to meet financial forecasts.
If the company fails to meet the financial forecasts outlined in this Agreement for [X] consecutive quarters, the company may be dissolved. The management will liquidate the assets, pay off all outstanding debts, and distribute the remaining funds to the shareholders or partners based on their ownership interests.
Dissolution due to a natural disaster or force majeure event
This clause allows dissolution due to a force majeure event.
In the event of a natural disaster or other force majeure event that significantly impacts the company’s ability to operate, the company may be dissolved. Upon dissolution, the company will liquidate its assets, settle liabilities, and distribute the remaining funds to shareholders or partners.
Dissolution upon the death of a shareholder or partner
This clause allows dissolution after the death of a shareholder.
In the event of the death of a shareholder or partner, the company may be dissolved unless the remaining shareholders or partners agree to continue the business. Upon dissolution, the company’s assets will be liquidated, and the deceased’s share will be distributed to their estate or heirs.
Dissolution due to insolvency or inability to pay debts
This clause allows dissolution due to insolvency.
If the company becomes insolvent or is unable to pay its debts as they become due, the company may be dissolved by a majority vote of the shareholders. The company will liquidate its assets, settle any outstanding liabilities, and distribute any remaining funds to the shareholders based on their ownership interests.
Dissolution upon the cessation of all business operations
This clause allows dissolution after business operations cease.
If the company ceases all business operations for a period of [X] consecutive months, the company may be dissolved. Following dissolution, the company will liquidate its assets, settle any debts or obligations, and distribute the remaining funds to the shareholders or partners in accordance with their ownership stakes.
Dissolution due to non-compliance with agreed-upon business goals
This clause allows dissolution for non-compliance with goals.
If the company fails to meet agreed-upon business goals or performance metrics specified in this Agreement, the company may be dissolved. The management will liquidate the assets, settle any liabilities, and distribute the remaining funds to the shareholders or partners based on their ownership percentages.
Dissolution due to legal or regulatory prohibitions
This clause allows dissolution due to legal prohibitions.
If a change in applicable laws or regulations prohibits the company from continuing its business operations, the company may be dissolved. The company will liquidate its assets, settle any outstanding debts, and distribute any remaining funds to the shareholders in proportion to their ownership stakes.
Dissolution upon voluntary termination of the partnership
This clause allows dissolution of a partnership.
The partnership may be voluntarily terminated and dissolved by mutual consent of all partners. Upon dissolution, the partnership’s assets will be liquidated, liabilities paid off, and any remaining funds will be distributed to the partners in accordance with their respective shares.
Dissolution due to changes in shareholder interests
This clause allows dissolution if shareholder interests change.
If there is a significant change in the shareholding structure of the company, such as the sale of more than [X]% of shares to an outside party, the company may be dissolved. The company will liquidate its assets, pay off debts, and distribute any remaining funds to shareholders in proportion to their ownership interests.
Dissolution for failure to renew contracts with key clients
This clause allows dissolution for failure to renew key contracts.
If the company fails to renew contracts with key clients that are vital for business operations, the company may be dissolved. The company will liquidate its assets, settle any liabilities, and distribute the remaining funds to shareholders or partners in accordance with their ownership stakes.
Dissolution due to a change in control of the company
This clause allows dissolution after a change in control.
In the event of a change in control of the company, such as the sale of a majority of shares or a merger, the company may be dissolved if agreed upon by [X]% of the shareholders. Upon dissolution, the company will liquidate its assets, pay off outstanding obligations, and distribute any remaining funds to shareholders based on their ownership interests.
Dissolution due to a failure in management
This clause allows dissolution for management failure.
If the company’s management fails to effectively run the business, resulting in consistent underperformance or failure to meet strategic objectives, the company may be dissolved. The assets will be liquidated, any outstanding liabilities paid off, and the remaining funds distributed to shareholders or partners.
Dissolution upon failure to secure necessary insurance
This clause allows dissolution for failure to secure insurance.
If the company fails to secure or maintain the necessary insurance coverage required to operate legally and protect its assets, the company may be dissolved. The company will liquidate its assets, settle any remaining obligations, and distribute the remaining funds to the shareholders or partners.
Dissolution for non-payment of obligations by the company
This clause allows dissolution for non-payment of obligations.
The company may be dissolved if it fails to pay its obligations as outlined in this Agreement within the agreed time frame. Upon dissolution, the company’s assets will be liquidated to settle its outstanding liabilities, and any remaining funds will be distributed to shareholders according to their ownership interests.
Dissolution upon failure to meet capital raising targets
This clause allows dissolution if capital raising targets are not met.
If the company is unable to raise the required capital as outlined in the business plan or financing agreements, it may be dissolved. The company will liquidate its assets, pay off any debts, and distribute any remaining funds to shareholders or partners in proportion to their ownership stakes.
Dissolution due to failure to execute the business plan
This clause allows dissolution if the business plan is not executed.
If the company fails to execute the business plan or fails to meet key milestones, the company may be dissolved. The assets will be liquidated, debts will be settled, and the remaining funds will be distributed to shareholders based on their ownership percentages.
Dissolution upon completion of company objectives
This clause allows dissolution once business objectives are completed.
The company will be dissolved once it has completed the objectives outlined in its business plan or agreement. Upon dissolution, the company will liquidate its assets, settle any liabilities, and distribute the remaining funds to shareholders according to their ownership stakes.
Dissolution due to failure to establish a customer base
This clause allows dissolution if the business fails to establish a customer base.
If the company is unable to establish a sustainable customer base within [X] months, the company may be dissolved. The company will liquidate its assets, pay off any remaining debts, and distribute the remaining funds to shareholders according to their ownership percentages.
Dissolution upon a significant financial loss
This clause allows dissolution following a significant financial loss.
If the company incurs a significant financial loss, defined as a loss of more than [X]% of its total value, the company may be dissolved. The assets will be liquidated to pay off debts, and the remaining funds will be distributed to shareholders or partners based on their ownership shares.
Dissolution due to a material breach of contract
This clause allows dissolution for a material breach of contract.
If a party to this Agreement commits a material breach that disrupts the company’s ability to continue operations, the company may be dissolved by agreement of [X]% of the shareholders. Following dissolution, the company’s assets will be liquidated, liabilities settled, and remaining funds distributed accordingly.
Dissolution after the sale of the business
This clause allows dissolution following the sale of the business.
If the company is sold to a third party, the company will be dissolved following the completion of the sale. The proceeds from the sale will be used to pay off any outstanding debts, and any remaining funds will be distributed to the shareholders or partners in accordance with their ownership interests.
Dissolution for failure to maintain profitability
This clause allows dissolution due to lack of profitability.
If the company fails to maintain profitability for [X] consecutive quarters, the company may be dissolved. Upon dissolution, the company’s assets will be liquidated, liabilities will be settled, and any remaining funds will be distributed to the shareholders in proportion to their ownership interests.
Dissolution due to conflict of interest among partners
This clause allows dissolution due to conflicts of interest.
If the partners are unable to resolve significant conflicts of interest that prevent the business from operating effectively, the company may be dissolved. The company will liquidate its assets, pay off debts, and distribute any remaining proceeds to the partners according to their ownership percentages.
Dissolution upon unanimous agreement of shareholders
This clause allows dissolution by unanimous agreement of shareholders.
The company may be dissolved upon unanimous agreement of all shareholders. Upon dissolution, the company will liquidate its assets, pay off outstanding liabilities, and distribute any remaining funds to the shareholders based on their ownership interests.
Dissolution for violation of applicable laws
This clause allows dissolution if laws are violated.
If the company is found to be in violation of applicable laws or regulations, and corrective actions cannot be taken within a reasonable period, the company may be dissolved. The company will liquidate its assets, settle any remaining liabilities, and distribute the remaining funds to shareholders or partners.
Dissolution upon a shareholder’s decision to exit
This clause allows dissolution if a shareholder exits.
If a shareholder wishes to exit the company and no agreement can be reached regarding the exit terms, the company may be dissolved. Upon dissolution, the company will liquidate its assets, pay off outstanding debts, and distribute any remaining funds to the shareholders based on their ownership shares.
Dissolution after the expiration of a fixed-term agreement
This clause allows dissolution after the expiration of a term.
The company shall be dissolved automatically upon the expiration of this Agreement unless a renewal or extension is mutually agreed upon. Upon dissolution, the company will liquidate its assets, pay off any outstanding liabilities, and distribute any remaining funds to the shareholders or partners in proportion to their ownership interests.
Dissolution due to inability to meet funding obligations
This clause allows dissolution for failure to meet funding requirements.
If the company fails to meet its funding obligations as outlined in this Agreement, the company may be dissolved. The assets will be liquidated to pay off any debts, and the remaining funds will be distributed to shareholders based on their ownership percentages.
Dissolution due to failure to resolve an internal dispute
This clause allows dissolution if an internal dispute cannot be resolved.
If an internal dispute between the shareholders or partners cannot be resolved, and the dispute significantly hinders the company’s operations, the company may be dissolved. The company will liquidate its assets, settle any outstanding liabilities, and distribute the remaining funds to the shareholders or partners.
Dissolution following a change in business objectives
This clause allows dissolution following a change in business objectives.
If the company undergoes a significant change in business objectives that is no longer aligned with the current structure, the company may be dissolved. The assets will be liquidated, outstanding debts will be settled, and remaining funds will be distributed to the shareholders or partners based on their ownership interests.
Dissolution due to shareholder disagreement on company strategy
This clause allows dissolution due to disagreement on strategy.
If the shareholders or partners disagree on the company’s strategic direction and the disagreement prevents the company from operating efficiently, the company may be dissolved. The company will liquidate its assets, settle any outstanding obligations, and distribute any remaining funds to the shareholders or partners.
Dissolution for failure to meet operational milestones
This clause allows dissolution for failing to meet milestones.
If the company fails to meet key operational milestones or performance metrics as outlined in the business plan, the company may be dissolved. The management will liquidate the company’s assets, settle debts, and distribute any remaining proceeds to the shareholders based on their ownership interests.
Dissolution after a shareholder’s breach of agreement
This clause allows dissolution for a shareholder’s breach.
If a shareholder breaches any significant provision of this Agreement, the company may be dissolved. Upon dissolution, the assets of the company will be liquidated, liabilities paid off, and the remaining funds will be distributed to the shareholders based on their ownership stakes.
Dissolution due to external financial pressure
This clause allows dissolution due to external financial pressures.
If the company faces external financial pressures such as creditor demands or the inability to secure financing, the company may be dissolved. The company will liquidate its assets, settle any debts, and distribute the remaining funds to the shareholders in accordance with their ownership interests.
Dissolution due to inability to maintain operations
This clause allows dissolution if the company cannot maintain operations.
If the company becomes unable to maintain its operations due to financial instability, loss of clients, or market failure, the company may be dissolved. The company will liquidate its assets, pay off any outstanding debts, and distribute the remaining funds to shareholders or partners.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.