Termination of a corporation’s legal existence is referred to as corporate dissolution. Either voluntarily or involuntarily, something can happen. If a corporation’s shareholders or board of directors elect to end operations and sell off its assets, the company may voluntarily dissolve. An involuntary dissolution, on the other hand, is when the state government compels a corporation to shut down owing to noncompliance with legal obligations like nonpayment of taxes or failure to complete annual reports.
In order to demonstrate that a corporation has paid all of its debts and fulfilled with all legal requirements, the corporation must get a certificate of good standing before dissolving. A certificate of good standing is a record that attests that a corporation has fulfilled all legal obligations, including filing yearly reports and paying taxes, and is qualified to conduct business in the state. A corporation must submit a request to the secretary of state of the state where it was incorporated in order to get a certificate of good standing.
On the other hand, a certificate of incumbency is a document that contains a list of a corporation’s officials and directors. It verifies the legitimacy of the people with the power to represent the corporation. Although they are related legal records, a certificate of incumbency and a certificate of good standing are not the same. When a corporation opens a bank account or engages in a business transaction, a certificate of incumbency is typically required.
A corporation that has been administratively dissolved in New Hampshire may submit an application for name protection. To prevent other entities from using the same name, the corporation can reserve its name for a certain amount of time, often 120 days. The corporation’s legal existence is not reinstated by name protection, though. The corporation must submit an application for reinstatement and settle all unpaid fines and costs before doing so.
A corporation must submit a change of address form to the Secretary of State if its address changes in New Hampshire. The new address and the day the change became effective must be listed on the form. The company can miss critical communications and notices if the address is not updated.
In conclusion, it is crucial for any business owner to comprehend the fundamentals of corporation dissolution. To demonstrate that a corporation has followed with all legal obligations before dissolving, a certificate of good standing is required. Although they are similar papers, a certificate of incumbency and a certificate of good standing have separate functions. An administratively dissolved corporation in New Hampshire may request name protection, but this does not reinstate its legal status. To make sure it receives vital notices and messages, a corporation that changes its address must submit a change of address form to the Secretary of State.