Definition - What does Voluntary Dissolution mean?
Voluntary dissolution refers to a situation where the controlling parties of a corporation (owners, shareholders, directors, etc.) choose to dissolve the corporation. Generally, voluntary dissolution of a corporation occurs only after a vote by the corporation’s controlling parties. If a majority of the controlling parties vote to dissolve the corporation, then the corporation must file a statement with the Secretary of State.
Justipedia explains Voluntary Dissolution
A voluntary dissolution can occur for any number of reasons. However, as explained, a corporation cannot dissolve itself unless at least a majority of the owners agree to do so. In many instances, a corporation will put it in their by-laws that the corporation cannot be voluntarily dissolved unless all of the owners agree to it. When a corporation is voluntarily dissolved, all of the assets of the corporation are then liquidized. Once this occurs, all debts of the corporation are then paid off. If there is any money left over, then it is split between the owners.