US Corporate Restructuring — Dissolution, M&A & Asset vs Share Purchase

Dissolving a Delaware LLC runs in four steps: (1) members vote to dissolve per the Operating Agreement; (2) wind up operations — clear creditor debts, liquidate assets; (3) file a Certificate of Cancellation (Form LLC-4/7) with the Delaware Division of Corporations, $200 filing fee; (4) file final federal and state tax returns. Delaware requires no pre-dissolution tax clearance, but all outstanding franchise taxes must be current. The state processes cancellations within 1–2 weeks (same-day for a $1,000 expedite fee).

Dissolving a Delaware C-Corp: (1) a board resolution authorizing dissolution; (2) a shareholder vote (majority or supermajority per charter); (3) filing a Certificate of Dissolution with the Delaware Division of Corporations, $204 fee. Before settling creditors or issuing shares, a Short Form Certificate of Dissolution is available. The final federal Form 1120 is filed marked 'Final Return'. Delaware franchise tax is paid in full through the dissolution year.

A Delaware statutory conversion turns an LLC into a C-Corp (or the reverse) without creating a new entity, transferring assets, or triggering a taxable event. It's the standard path when a startup begun as an LLC decides to raise VC funding and needs C-Corp structure. The process requires a Plan of Conversion, member/shareholder approval, and filing a Certificate of Conversion with a Certificate of Incorporation in Delaware (combined fee ~$220). Timeline: 1–3 days.

Delaware's flexible merger statute (DGCL Section 251) merges two or more corporations with board and shareholder approval. The short form (Section 253) lets a 90%+ parent absorb a subsidiary without a subsidiary shareholder vote. Triangular mergers, forward and reverse, are the M&A standard: they preserve contracts and skip asset-by-asset transfers. The Delaware Court of Chancery sets authoritative precedent on fiduciary duties — which is why complex deals come here.

When a US LLC or C-Corp is dissolved, winding up requires paying all known creditors before assets go to members or shareholders. Directors and managers carry a fiduciary duty to known creditors during wind-down. If assets fall short, creditors are paid in statutory priority order, secured creditors first; members and shareholders bear losses last. For unknown creditors who received published notice of dissolution, Delaware holds a 10-year claims bar period — long-term liability protection for former members.