14A:12-9. Effect of dissolution

424 words·~2 min read·/nj/title-14a/chapter-12/14a-12-9

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)Except as a court may otherwise direct, a dissolved corporation shall continue its corporate existence but shall carry on no business except for the purpose of winding up its affairs by

(a)collecting its assets;

(b)conveying for cash or upon deferred payments, with or without security, such of its assets as are not to be distributed in kind to its shareholders;

(c)paying, satisfying and discharging its debts and other liabilities; and

(d)doing all other acts required to liquidate its business and affairs.

(2)Subject to the provisions of subsection 14A:12-9(1), and except as otherwise provided by court order, the corporation, its officers, directors and shareholders shall continue to function in the same manner as if dissolution had not occurred. In particular, and without limiting the generality of the foregoing,

(a)the directors of the corporation shall not be deemed to be trustees of its assets and shall be held to no greater standard of conduct than that prescribed by section 14A:6-14;

(b)title to the corporation's assets shall remain in the corporation until transferred by it in the corporate name;

(c)the dissolution shall not change quorum or voting requirements for the board or shareholders, nor shall it alter provisions regarding election, appointment, resignation or removal of, or filling vacancies among, directors or officers, or provisions regarding amendment or repeal of by-laws or adoption of new by-laws;

(d)shares may be transferred until the record date of the final liquidating distribution or dividend to shareholders;

(e)the corporation may sue and be sued in its corporate name and process may issue by and against the corporation in the same manner as if dissolution had not occurred;

(f)no action brought against any corporation prior to its dissolution shall abate by reason of such dissolution.

(3)The right of the corporation to sell its assets and the right of a shareholder to dissent from such sale shall be governed by Chapters 10 and 11 in the same manner as if dissolution had not occurred.

(4)A dissolved corporation may condition the payment to its shareholders

(a)of any partial liquidating distribution or dividend on the surrender to it of the share certificates on which the distribution or dividend is to be paid for endorsement to reflect such payment; or

(b)of the final liquidating distribution or dividend on the surrender to it for cancellation of the share certificates on which the distribution or dividend is to be paid.

L.1968, c.350; amended by L.1973, c. 366, s. 69, eff. May 1, 1974.