A corporation that intends to dissolve must take the following steps:

1. Cease to transact any business, other than that which might be necessary to wind up the business affairs;
2. Give appropriate notice of its intention to dissolve to any claimant of the corporation;
3. Collect all assets, and discharge of or pay all debts, obligations, and liabilities; and
4. Distribute the remaining assets and properties to its shareholders according to proportionate interest.

In order to voluntarily dissolve, a corporation must be current on all of its tax filings, and appropriate tax certification must be obtained from the state. This certification must be filed, along with Articles of Dissolution. A corporation continues to incur tax liability until it is dissolved.

With very few exceptions, there is generally no rule which allows a shareholder to force the dissolution and liquidation of a corporation. A corporation is a separate legal entity which is entitled to continue to exist even if some of the shareholders are less than happy. Without a buy-sell agreement, there is no rule that requires majority shareholders to pay dissatisfied minority shareholders for their shares if the minority shareholders want to take their money and leave. This, by the way, is a very good reason to have a buy-sell agreement.

As a practical matter, however, the dissatisfaction of minority shareholders is often caused by improper or illegal acts of majority shareholders in control of the company. Those majority shareholders in control may be subject to suits on grounds including breach of fiduciary duty. The result of such disputes is very often the dissolution of the corporation and the distribution of the assets to the shareholders after the payment of debts.

If a partnership is set up for a definite term or for a particular undertaking, or its partnership agreement provides for a specified event requiring winding up, the partnership automatically requires a winding up upon the express will of the partners, the expiration of the term, the completion of the undertaking, or the occurrence of the specified event described in the partnership agreement.

If a partnership is not set up for a definite term or for a particular undertaking, and its partnership agreement does not provide for a specified event requiring winding up, winding up occurs upon the express will of all of a majority-in-interest of the partners who have not assigned their interest.

Some other occurrences which require the winding up of a partnership are if (1) an event causes it to be illegal for all or substantially all of the business of the partnership to be continued, although a cure within 90 days after notice to the partnership of such event is effective retroactively to the date of the event; or (2) all or substantially all of the property of a partnership is sold outside of the normal course of business.

As with dissolution of a corporation, the affairs of the partnership must be settled, property disposed of, liabilities satisfied, and any remaining property distributed to the partners.

Under certain circumstances, a partner can force the winding up of a partnership. If a partnership is not set up for a definite term or for a particular undertaking, and its partnership agreement does not provide for a specified event requiring winding up, a partner may make a request (unless the partner has agreed not to withdraw) for winding up within 60 days of notice to the partnership, or at a specified later date. However, the other partners reserve the right to continue. If the business is continued by a majority-in-interest of the other partners or by persons who have habitually acted in the business, without any settlement or liquidation, it is assumed that the option to continue has been exercised.

A partner may make an application for a Judicial Decree requiring a winding up of the partnership if: (1) the economic purpose of the partnership is likely to be unreasonably frustrated, (2) another partner has engaged in conduct relating to the partnership business that makes it not reasonably practicable to carry on the business in partnership with that partner, or (3) it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement.

If no capital has been paid into the company, and the LLC has not otherwise commenced business, a majority of the managers or members may elect to dissolve an LLC. An LLC may be set up for a fixed duration, or its company agreement may specify dissolution upon the occurrence of a specified event. If none of these is the case, all of the members or managers must consent to dissolution. Otherwise, an event that terminates the membership of the last remaining member in the LLC automatically requires dissolution.

In the same manner as a corporation, in order to voluntarily dissolve, a limited liability company must wind up its business, collect all assets, satisfy all debts and obligations, and distribute the remaining assets proportionately to its members. Certification stating that the company is current on its tax filings must be obtained from the state and filed, along with Articles of Dissolution. Tax liability continues to be incurred until the company is dissolved.

Short of court intervention, there is no provision which allows a member of a multi-member LLC to force the dissolution and liquidation of the company. However, a member may make an application to a court with proper jurisdiction for a decree of judicial dissolution, if the court determines that it is not reasonably practical to carry on the business of the LLC under its current formation guidelines and company agreement.