Minutes of Special Meeting of Shareholders Approving Dissolution
(CA Corporation)

Summary

This is a template of the minutes of a special meeting of shareholders approving the dissolution of a California corporation. This template includes practical guidance, drafting notes, and optional clauses. Under California law, any corporation may elect voluntarily to dissolve by the approval of shareholders representing at least 50% of the corporation's voting power. Cal. Corp. Code § 1900. This template minutes of a special meeting of the shareholders contemplates approval of the dissolution at a meeting of the shareholders; alternatively, the shareholders may act by written consent in lieu of an actual meeting. Each shareholder entitled to vote must be given notice of the meeting to vote on the dissolution at least 10 days (but not more than 60 days) prior to the meeting, which notice must specify the date, time, and place of the meeting (and electronic transmission details, if applicable), and the general purpose of the meeting. Cal. Corp. Code § 601. Eligibility to vote is based on the holders of record as of the close of business on the day before the notice is first delivered to any shareholders, or on a date fixed by the board (which must be at least 10 days and no more than 60 days prior to the meeting). Cal. Corp. Code § 701. This template assumes that the vote will take place during a special meeting of the shareholders; if it will instead be part of the regular annual meeting of the shareholders then the template can be adjusted accordingly. Once dissolution of the corporation has been approved by the shareholders, the corporation must deliver to California's Secretary of State a certificate of election (signed by either an officer, at least a majority of the directors, or by shareholders authorized to sign such certificate by shareholders holding at least 50% of the voting power) evidencing the decision to dissolve, which should state that the corporation has elected to dissolve; the number of shares voting for the election (and a statement that the election was made by shareholders holding at least 50% of the voting power of the corporation); and, if the certificate is signed by a shareholder, a statement that such shareholder was duly authorized by the holders of at least 50% of the voting power of the corporation. Cal. Corp. Code § 1901. The corporation may then take various steps to wind up and liquidate its business but is not otherwise permitted to carry on any business except as necessary for a beneficial winding up or to preserve goodwill pending a sale of any portion of the corporation's business or assets. Cal. Corp. Code § 1903. Once all debts and other obligations of the corporation have been paid and discharged (or adequate provision has been made for such payment and discharge), the corporation can dissolve by filing with California's Secretary of State a certificate of dissolution (signed and verified by a majority of the directors then in office) containing certain specified items (an official form is available on the secretary of state's website). A final franchise tax return must also be filed. Cal. Corp. Code § 1905. For a full listing of related California corporation content, including content relating to corporate formation, maintenance, ownership, management, and dissolution, see Corporation Resource Kit (CA). For more information on the dissolution of California corporations, see Dissolution (CA Corporation).