Though a range of factors may trigger dissolution, dissolution is a process that may take considerable time to accomplish. Ultimately, the conclusion of this process results in the cessation of the corporate entity. Some modern statutes, such as the Texas Business Organizations Code, uses “termination” instead of “dissolution”, but the process is the same. This article will discuss that process in the liquidation and three types of dissolution.

1. Types of U.S. Company Dissolution
   
   

   (1)	Voluntary Dissolution. Voluntary dissolution refers to the decision made by an entity to dissolve. This is a fundamental change, and the procedure discussed in article titled “Types and Procedures of Fundamental Corporate Change in U.S.A” is followed. Thus, in most states, the board of directors and the shareholders must approve the voluntary dissolution. However, in certain states such as New York, voluntary dissolution can be achieved through a share vote without the need for board of director involvement. Regardless of the method by which voluntary dissolution is triggered, at some point in the process, the corporation must give notice to creditors. This will ensure the orderly payment of obligations. Moreover, the board of directors must ensure that all franchise and other taxes have been paid. And it is essential that creditors are prioritized for payment ahead of shareholders in the distribution of liquidation proceeds. Voluntary dissolution does not trigger the right of appraisal. Given that the corporation is in the process of terminating its existence, it makes no sense to grant a shareholder to force the company to repurchase their shares. Voluntary dissolution can be used to freeze out minority shareholders unfairly. For instance, controlling shareholders might initiate dissolution to keep minority shareholders from sharing in a profitable business. Upon dissolution, some other entity, owned by the controlling shareholders, must take over the business. In such cases, the judiciary must intervene and safeguard the rights of minority shareholders by allowing them to pursue legal action for the breach of fiduciary duty owed to them.
   (2)	Administrative Dissolution Administrative dissolution refers to the process by which a state official issues a decree for the dissolution of a corporation without the need for court involvement or a judicial order. This action is typically taken when the corporation's owners have abandoned the business, leading to non-payment of franchise taxes, failure to submit annual reports, or neglect of other mandatory corporate obligations. The specific reasons and procedures for administrative dissolution can vary among states.   The statutes mandate that the state officer give notice of the intent to dissolve the corporation. Failure of the owners to address the issues or rectify the situation results in the corporation losing its charter and ceasing to exist. However, statutes may also provide for the reinstatement of the corporation if the owners resolve the issues within a set time.
   (3)	Involuntary Dissolution Involuntary dissolution is that someone goes to court to seek an order dissolving the corporation. In most states, a creditor may do this if the corporation is insolvent and either the creditor has a judgment against the corporation, or the company admits the debt in writing. In many states, a shareholder may seek dissolution on various grounds, including: (a) The situation where a director is unable to resolve a deadlock within the corporation, leading to potential or actual irreparable harm to the corporation. (b) The situation of shareholder deadlock arises when there is a failure to reach a consensus among shareholders, resulting in the inability to fill a vacant seat on the board for at least two consecutive annual meetings. (c) waste or misapplication of corporate assets, or (d) management is engaged in “illegal, oppressive, or fraudulent” behaviour. Generally, a request for involuntary dissolution by a shareholder is commonly initiated within a close corporation. Indeed, under MBCA (2016), the shareholder petition is available only in close corporations. In some states, only specified proportions of shares within a close corporation (e.g.,20 percent) can seek involuntary dissolution. In some states, the court has the authority to reject a shareholder's request for dissolution if the court sanctions the purchase of the shares held by the petitioning shareholder. In some states, courts will permit the corporation or other shareholders to avoid dissolution by purchasing the complaining shareholder's stock for fair value, even in the absence of explicit statutory provisions. Thus, the result of a petition may be that the complaining shareholder is cashed out and the business continues without their involvement.

   
   
2. The Liquidation Process of U.S. Company
   
   As mentioned, dissolution is a process, Following the initiation event, such as the approval of voluntary dissolution or a court-ordered involuntary dissolution, the corporation continues to exist solely for the purpose of liquidation, commonly referred to as "winding up". The board of directors usually supervises this process, however, in cases where the directors have exhibited misconduct, the court may designate a receiver to oversee the liquidation. The liquidation process consists of four major steps.
   
   

   (1)	First, those in charge gather the corporate assets. This includes claims the corporation may have against others. The corporation may bring suit to perfect those claims and gather the assets.
   (2)	Second, they convert the assets to cash by selling them off; this is “liquidation.”
   (3)	Third, they then pay creditors and set aside an appropriate amount to cover prospective claims.
   (4)	Finally, they distribute the remainder to shareholders.

   
   It is important to understand that shareholders are last in line. As holders of the equity interest in the company, they can receive their liquidating distribution only after the creditors (the holders of debt interests) are paid off. Managers can be personally liable for distributions wrongfully made to shareholders before debts are discharged.
   
   Shareholders receive the liquidating distribution just as they receive dividends: pro rata by share. The articles may provide for a “liquidation preference” for a particular class, which will work just as a dividend preference: the preferred shares are paid first, before the common shares.
   
   After the debts are paid, or provided for, and the remaining money distributed to shareholders, the directors certify these facts to the appropriate state officer (usually the secretary of state), who files a certificate formally ending the existence of the corporation.
   

Reference:
[1] Richard D. Freer. The law of corporations in a nutshell. West Pub. Co, 2020.