Unlike other forms of carrying on business, such as a partnership or sole proprietorship, a corporation benefits from perpetual existence. This means that even if one or all of its shareholder were to die or withdraw, the corporation would continue to exist.
There are only three ways that a corporation would “die” or cease to exist. These are by:
- Resolution of the majority of the shareholders
- Court order; or
- By order of the director appointed under the relevant jurisdiction
To determine what would constitute the “majority of the shareholders”, a review of the shareholders’ ledger in the corporate minute book will be necessary. The company’s minute book will also have all relevant by-laws, directors’ resolutions and shareholders’ agreement, which may further outline the mechanisms for corporate change or dissolution.