DISSOLUTION

Idaho Code tit. 30, ch. 30-29, pt. 30-29-14

in effect

Idaho Code § 30-29-1401 DISSOLUTION BY INCORPORATORS OR INITIAL DIRECTORS.

30-29-1401. DISSOLUTION BY INCORPORATORS OR INITIAL DIRECTORS. A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve the corporation by delivering to the secretary of state for filing articles of dissolution that set forth: (a) The name of the corporation; (b) The date of its incorporation; (c) Either: (1) That none of the corporation’s shares has been issued; or (2) That the corporation has not commenced business; (d) That no debt of the corporation remains unpaid; (e) That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued; and (f) That a majority of the incorporators or initial directors authorized the dissolution. [30-29-1401, added 2015, ch. 243, sec. 69, p. 956; am. 2019, ch. 90, sec. 145, p. 319.]

Idaho Code § 30-29-1402 DISSOLUTION BY BOARD OF DIRECTORS AND SHAREHOLDERS.

30-29-1402. DISSOLUTION BY BOARD OF DIRECTORS AND SHAREHOLDERS. (a) The board of directors may propose dissolution for submission to the shareholders by first adopting a resolution authorizing the dissolution. (b) For a proposal to dissolve to be adopted, the proposal to dissolve shall then be approved by the shareholders. In submitting the proposal to dissolve to the shareholders for approval, the board of directors shall recommend that the shareholders approve the dissolution, unless either the board of directors determines that because of conflicts of interest or other special circumstances it should make no recommendation or section 30-29-826 , Idaho Code, applies. In either case, the board shall inform the shareholders of the basis for its so proceeding. (c) The board of directors may set conditions for the approval of the proposal for dissolution by shareholders or the effectiveness of the dissolution. (d) If the approval of the shareholders is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the dissolution is to be submitted for approval. The notice must state that the purpose, or one (1) of the purposes, of the meeting is to consider dissolving the corporation. (e) Unless the articles of incorporation or the board of directors, acting pursuant to subsection (c) of this section, require a greater vote, a greater quorum, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the shareholders at a meeting at which a quorum exists consisting of a majority of the votes entitled to be cast on the proposal to dissolve. [30-29-1402, added 2015, ch. 243, sec. 69, p. 957; am. 2019, ch. 90, sec. 146, p. 320.]

Idaho Code § 30-29-1403 ARTICLES OF DISSOLUTION.

30-29-1403. ARTICLES OF DISSOLUTION. (a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the secretary of state for filing articles of dissolution setting forth: (1) The name of the corporation; (2) The date that dissolution was authorized; and (3) If dissolution was approved by the shareholders, a statement that the proposal to dissolve was duly approved by the shareholders in the manner required by this chapter and by the articles of incorporation. (b) The articles of dissolution shall take effect at the effective date determined in accordance with section 30-29-123 , Idaho Code. A corporation is dissolved upon the effective date of its articles of dissolution. (c) For purposes of sections 30-29-1401 through 30-29-1409 , Idaho Code, "dissolved corporation" means a corporation whose articles of dissolution have become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation. [30-29-1403, added 2015, ch. 243, sec. 69, p. 957; am. 2019, ch. 90, sec. 147, p. 320.]

Idaho Code § 30-29-1404 REVOCATION OF DISSOLUTION.

30-29-1404. REVOCATION OF DISSOLUTION. (a) A corporation may revoke its dissolution within one hundred twenty (120) days after its effective date. (b) Revocation of dissolution shall be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without shareholder action. (c) After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the secretary of state for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth: (1) The name of the corporation; (2) The effective date of the dissolution that was revoked; (3) The date that the revocation of dissolution was authorized; (4) If the corporation’s board of directors or incorporators revoked the dissolution, a statement to that effect; (5) If the corporation’s board of directors revoked a dissolution as authorized by the shareholders, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and (6) If shareholder action was required to revoke the dissolution, a statement that the revocation was duly approved by the shareholders in the manner required by this chapter and by the articles of incorporation. (d) The articles of revocation of dissolution shall take effect at the effective date determined in accordance with section 30-29-123 , Idaho Code. (e) Revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution. (f) When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its business as if dissolution had never occurred. [30-29-1404, added 2015, ch. 243, sec. 69, p. 957; am. 2019, ch. 90, sec. 148, p. 321.]

Idaho Code § 30-29-1405 EFFECT OF DISSOLUTION.

30-29-1405. EFFECT OF DISSOLUTION. (a) A corporation that has dissolved continues its corporate existence, but the dissolved corporation may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including: (1) Collecting its assets; (2) Disposing of its properties that will not be distributed in kind to its shareholders; (3) Discharging or making provision for discharging its liabilities; (4) Making distributions of its remaining assets among its shareholders according to their interests; and (5) Doing every other act necessary to wind up and liquidate its business and affairs. (b) Dissolution of a corporation does not: (1) Transfer title to the corporation’s property; (2) Prevent transfer of its shares or securities; (3) Subject its directors or officers to standards of conduct different from those prescribed in part 8 of this chapter; (4) Change quorum or voting requirements for its board of directors or shareholders; change provisions for selection, resignation, or removal of its directors or officers or both; or change provisions for amending its bylaws; (5) Prevent commencement of a proceeding by or against the corporation in its corporate name; (6) Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or (7) Terminate the authority of the registered agent of the corporation. (c) A distribution in liquidation under this section may only be made by a dissolved corporation. For purposes of determining the shareholders entitled to receive a distribution in liquidation, the board of directors may fix a record date for determining shareholders entitled to a distribution in liquidation, which date may not be retroactive. If the board of directors does not fix a record date for determining shareholders entitled to a distribution in liquidation, the record date is the date the board of directors authorizes the distribution in liquidation. [30-29-1405, added 2015, ch. 243, sec. 69, p. 958; am. 2019, ch. 90, sec. 149, p. 321.]

Idaho Code § 30-29-1406 KNOWN CLAIMS AGAINST DISSOLVED CORPORATION.

30-29-1406. KNOWN CLAIMS AGAINST DISSOLVED CORPORATION. (a) A dissolved corporation may dispose of the known claims against it by notifying its known claimants in writing of the dissolution at any time after its effective date. (b) The written notice must: (1) Describe information that must be included in a claim; (2) Provide a mailing address where a claim may be sent; (3) State the deadline, which may not be fewer than one hundred twenty (120) days after the written notice is effective, by which the dissolved corporation shall receive the claim; and (4) State that the claim will be barred if not received by the deadline. (c) A claim against the dissolved corporation is barred: (1) If a claimant who was given written notice under subsection (b) of this section does not deliver the claim to the dissolved corporation by the deadline; or (2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety (90) days after the rejection notice is effective. (d) For purposes of this section, "claim" does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution. [30-29-1406, added 2015, ch. 243, sec. 69, p. 958; am. 2019, ch. 90, sec. 150, p. 322.]

Idaho Code § 30-29-1407 OTHER CLAIMS AGAINST DISSOLVED CORPORATION.

30-29-1407. OTHER CLAIMS AGAINST DISSOLVED CORPORATION. (a) A dissolved corporation may publish notice of its dissolution and request that persons with claims against the dissolved corporation present them in accordance with the notice. (b) The notice must: (1) Be published one (1) time in a newspaper of general circulation in the county where the dissolved corporation’s principal office is or was located or, if none in this state, in Ada county, or be posted conspicuously for at least thirty (30) days on the dissolved corporation’s website; (2) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and (3) State that a claim against the dissolved corporation will be barred unless a proceeding to enforce the claim is commenced within two (2) years after the publication of the notice. (c) If the dissolved corporation publishes a notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within three (3) years after the publication date of the notice: (1) A claimant who was not given written notice under section 30-29-1406 , Idaho Code; (2) A claimant whose claim was timely sent to the dissolved corporation but not acted on by the corporation; and (3) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution. (d) A claim that is not barred by section 30-29-1406 (c), Idaho Code, or subsection (c) of this section may be enforced: (1) Against the dissolved corporation, to the extent of its undistributed assets; or (2) Except as provided in section 30-29-1408 (d), Idaho Code, if the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of the shareholder’s pro rata share of the claim or the corporate assets distributed to the shareholder in liquidation, whichever is less, but a shareholder’s total liability for all claims under this section may not exceed the total amount of assets distributed to the shareholder. [30-29-1407, added 2015, ch. 243, sec. 69, p. 959; am. 2019, ch. 90, sec. 151, p. 322.]

Idaho Code § 30-29-1408 COURT PROCEEDINGS.

30-29-1408. COURT PROCEEDINGS. (a) A dissolved corporation that has published a notice under section 30-29-1407 , Idaho Code, may file an application with the district court of the county where the dissolved corporation’s principal office is located, or, if none in this state, Ada county, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved corporation or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under section 30-29-1407 (c), Idaho Code. (b) Within ten (10) days after the filing of the application, notice of the proceeding shall be given by the dissolved corporation to each claimant holding a contingent claim whose contingent claim is shown on the records of the dissolved corporation. (c) The court may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of such guardian, including all reasonable expert witness fees, shall be paid by the dissolved corporation. (d) Provision by the dissolved corporation for security in the amount and the form ordered by the court under subsection (a) of this section shall satisfy the dissolved corporation’s obligations with respect to claims that are contingent, have not been made known to the dissolved corporation or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a shareholder who received assets in liquidation. [30-29-1408, added 2015, ch. 243, sec. 69, p. 959; am. 2019, ch. 90, sec. 152, p. 323.]

Idaho Code § 30-29-1409 DIRECTOR DUTIES.

30-29-1409. DIRECTOR DUTIES. (a) Directors shall cause the dissolved corporation to discharge or make reasonable provision for the payment of claims and make distributions in liquidation of assets to shareholders after payment or provision for claims. (b) Directors of a dissolved corporation that has disposed of claims under section 30-29-1406 , 30-29-1407 , or 30-29-1408 , Idaho Code, shall not be liable for breach of subsection (a) of this section, with respect to claims against the dissolved corporation that are barred or satisfied under section 30-29-1406 , 30-29-1407 , or 30-29-1408 , Idaho Code. [30-29-1409, added 2015, ch. 243, sec. 69, p. 960; am. 2019, ch. 90, sec. 153, p. 324.]

Idaho Code § 30-29-1430 GROUNDS FOR JUDICIAL DISSOLUTION.

30-29-1430. GROUNDS FOR JUDICIAL DISSOLUTION. (a) The Idaho district court designated in section 30-29-1431 (a), Idaho Code, may dissolve a corporation: (1) In a proceeding by the attorney general if it is established that: (i) The corporation obtained its articles of incorporation through fraud; or (ii) The corporation has continued to exceed or abuse the authority conferred upon it by law; (2) In a proceeding by a shareholder if it is established that: (i) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock; (ii) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent; (iii) The shareholders are deadlocked in voting power and have failed, for a period that includes at least two (2) consecutive annual meeting dates to elect successors to directors whose terms have expired; or (iv) The corporate assets are being misapplied or wasted; (3) In a proceeding by a creditor if it is established that: (i) The creditor’s claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or (ii) The corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent; (4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or (5) In a proceeding by a shareholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and dissolve. (b) The provisions of subsection (a)(2) of this section shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has a class or series of shares that is: (1) A covered security under section 18(b)(1)(A) or (B) of the securities act of 1933; or (2) Not a covered security, but is held by at least three hundred (300) shareholders and the shares outstanding have a market value of at least twenty million dollars ($20,000,000), exclusive of the value of such shares held by the corporation’s subsidiaries, senior executives, directors, and beneficial shareholders and voting trust beneficial owners owning more than ten percent (10%) of such shares. (c) As used in subsection (a) of this section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner; and in subsection (b) of this section, "shareholder" means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner. [30-29-1430, added 2015, ch. 243, sec. 69, p. 960; am. 2019, ch. 90, sec. 154, p. 324.]

Idaho Code § 30-29-1431 PROCEDURE FOR JUDICIAL DISSOLUTION.

30-29-1431. PROCEDURE FOR JUDICIAL DISSOLUTION. (a) Venue for a proceeding by the attorney general to dissolve a corporation lies in Ada county. Venue for a proceeding brought by any other party named in section 30-29-1430 (a), Idaho Code, lies in the county where a corporation’s principal office is or was located or, if none in this state, in Ada county. (b) It is not necessary to make shareholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually. (c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian during the proceeding with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held. (d) Within ten (10) days of the commencement of a proceeding to dissolve a corporation under section 30-29-1430 (a)(2), Idaho Code, the corporation shall deliver to all shareholders, other than the petitioner, a notice stating that the shareholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner’s shares under section 30-29-1434 , Idaho Code, and accompanied by a copy of section 30-29-1434 , Idaho Code. [30-29-1431, added 2015, ch. 243, sec. 69, p. 960; am. 2019, ch. 90, sec. 155, p. 325.]

Idaho Code § 30-29-1432 RECEIVERSHIP OR CUSTODIANSHIP.

30-29-1432. RECEIVERSHIP OR CUSTODIANSHIP. (a) Unless an election to purchase has been filed under section 30-29-1434 , Idaho Code, a court in a judicial proceeding brought to dissolve a corporation may appoint one (1) or more receivers to wind up and liquidate, or one (1) or more custodians to manage, the business and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has jurisdiction over the corporation and all of its property, wherever located. (b) The court may appoint an individual or a domestic or foreign corporation or eligible entity as a receiver or custodian, which, if a foreign corporation or foreign eligible entity, must be registered to do business in this state. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs. (c) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers: (1) The receiver: (i) May dispose of all or any part of the assets of the corporation, wherever located, at a public or private sale; and (ii) May sue and defend in the receiver’s own name as receiver of the corporation in all courts of this state; (2) The custodian may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors; The receiver or custodian shall have such other powers and duties as the court may provide in the appointing order, which may be amended from time to time. (d) The court during a receivership, may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver. (e) The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian and his counsel from the assets of the corporation or proceeds from the sale of the assets. [30-29-1432, added 2015, ch. 243, sec. 69, p. 961; am. 2019, ch. 90, sec. 156, p. 325.]

Idaho Code § 30-29-1433 DECREE OF DISSOLUTION.

30-29-1433. DECREE OF DISSOLUTION. (a) If after a hearing the court determines that one (1) or more grounds for judicial dissolution described in section 30-29-1430 , Idaho Code, exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the secretary of state for filing. (b) After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation’s business and affairs in accordance with section 30-29-1405 , Idaho Code, and the notification of claimants in accordance with sections 30-29-1406 and 30-29-1407 , Idaho Code. [30-29-1433, added 2015, ch. 243, sec. 69, p. 961; am. 2019, ch. 90, sec. 157, p. 326.]

Idaho Code § 30-29-1434 ELECTION TO PURCHASE IN LIEU OF DISSOLUTION.

30-29-1434. ELECTION TO PURCHASE IN LIEU OF DISSOLUTION. (a) In a proceeding under section 30-29-1430 (a)(2), Idaho Code, to dissolve a corporation, the corporation may elect or, if it fails to elect, one (1) or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares. An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election. (b) An election to purchase pursuant to this section may be filed with the court at any time within ninety (90) days after the filing of the petition under section 30-29-1430 (a)(2), Idaho Code, or at such later time as the court in its discretion may allow. If the election to purchase is filed by one (1) or more shareholders, the corporation shall, within ten (10) days thereafter, give written notice to all shareholders, other than the petitioner. The notice must state the name and number of shares owned by the petitioner and the name and number of shares owned by each electing shareholder and must advise the recipients of their right to join in the election to purchase shares in accordance with this section. Shareholders who wish to participate shall file notice of their intention to join in the purchase no later than thirty (30) days after the effectiveness of the notice to them. All shareholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of shares as of the date the first election was filed, unless they otherwise agree or the court otherwise directs. After an election has been filed by the corporation or one (1) or more shareholders, the proceeding under section 30-29-1430 (a)(2), Idaho Code, may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of his or her shares, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioner, to permit such discontinuance, settlement, sale, or other disposition. (c) If, within sixty (60) days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner’s shares, the court shall enter an order directing the purchase of the petitioner’s shares upon the terms and conditions agreed to by the parties. (d) If the parties are unable to reach an agreement as provided for in subsection (c) of this section, the court, upon application of any party, shall stay the proceedings under section 30-29-1430 (a)(2), Idaho Code, and determine the fair value of the petitioner’s shares as of the day before the date on which the petition under section 30-29-1430 (a)(2), Idaho Code, was filed or as of such other date as the court deems appropriate under the circumstances. (e) Upon determining the fair value of the shares, the court shall enter an order directing the purchase upon such terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional expenses as may have been awarded, and, if the shares are to be purchased by shareholders, the allocation of shares among them. In allocating the petitioner’s shares among holders of different classes or series of shares, the court should attempt to preserve the existing distribution of voting rights among holders of different classes or series insofar as practicable and may direct that holders of a specific class or classes or series shall not participate in the purchase. Interest may be allowed at the rate and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed. If the court finds that the petitioning shareholder had probable grounds for relief under section 30-29-1430 (a)(2)(ii) or (iv), Idaho Code, it may award expenses to the petitioning shareholder. (f) Upon entry of an order under subsection (c) or (e) of this section, the court shall dismiss the petition to dissolve the corporation under section 30-29-1430 (a)(2), Idaho Code, and the petitioning shareholder shall no longer have any rights or status as a shareholder of the corporation, except the right to receive the amounts awarded by the order of the court that shall be enforceable in the same manner as any other judgment. (g) The purchase ordered pursuant to subsection (e) of this section shall be made within ten (10) days after the date the order becomes final. (h) Any payment by the corporation pursuant to an order under subsection (c) or (e) of this section, other than an award of expenses pursuant to subsection (e) of this section, is subject to the provisions of section 30-29-640 , Idaho Code. [30-29-1434, added 2015, ch. 243, sec. 69, p. 962; am. 2019, ch. 90, sec. 158, p. 326.]

Idaho Code § 30-29-1440 DEPOSIT WITH STATE TREASURER.

30-29-1440. DEPOSIT WITH STATE TREASURER. Assets of a dissolved corporation that should be transferred to a creditor, claimant or shareholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the state. [30-29-1440, added 2015, ch. 243, sec. 69, p. 963.]

Source: Idaho State Legislature (legislature.idaho.gov)URL: https://legislature.idaho.gov/statutesrules/idstat/Title30/T30CH29PT14/Fetched: 10/20/2026