Dissolution: Glossary Definition

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Definition of Dissolution:

“Dissolution” is the legal term describing the termination of a corporation’s or LLC’s (or other type of business entity) legal existence. Dissolution may occur voluntarily or involuntarily. Voluntary dissolution may occur when the entity files a certificate of dissolution with the Secretary of State in the entity’s state of formation. Involuntary dissolution may occur when a company fails to file annual reports or pay certain taxes.

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Today’s Question — Friday, July 30

Must I pay all of my employees?

It is not unusual for start-up companies to have limited cash resources. It is also not unusual for entrepreneurs to entice employees to the company by offering stock compensation, instead of cash, until such time as the business can afford to pay regular salaries. However, it is advisable to consult with an employment lawyer in your state of operations to determine if this is permissible under the state’s wage statutes. In most cases, the lawyer will likely advise that each employee be paid an amount equal to applicable minimum wage amounts.

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