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

To dissolve a Delaware LLC: (1) Members vote to dissolve per the Operating Agreement. (2) Wind up operations — pay all creditors, 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 does not require a pre-dissolution tax clearance, but all outstanding franchise taxes must be current. The state processes cancellations within 1–2 weeks (same-day for $1,000 expedite fee).

Dissolution of a Delaware C-Corp requires: (1) Board resolution authorizing dissolution. (2) Shareholder vote (majority or supermajority per charter). (3) File a Certificate of Dissolution with the Delaware Division of Corporations ($204 fee). If dissolving before paying creditors or issuing shares, a Short Form Certificate of Dissolution is available. Final federal Form 1120 must be filed (mark 'Final Return'). Delaware franchise tax must be paid in full through the dissolution year.

A Delaware statutory conversion allows an LLC to convert to a C-Corp (or vice versa) without creating a new entity, transferring assets, or triggering a taxable event. This is the standard path when a startup initially formed 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 and Certificate of Incorporation with Delaware (combined fee ~$220). Timeline: 1–3 days.

Delaware's flexible merger statute (DGCL Section 251) allows two or more corporations to merge with Board and shareholder approval. Short-form mergers (Section 253) allow a 90%+ parent to merge a subsidiary without subsidiary shareholder vote. Triangular mergers (forward or reverse) are standard in M&A to preserve contracts and avoid individual asset transfers. Delaware courts — particularly the Court of Chancery — provide authoritative precedent on fiduciary duties, making Delaware the preferred jurisdiction for complex M&A transactions.

When a US LLC or C-Corp is dissolved, the winding-up process requires paying all known creditors before distributing assets to members or shareholders. Directors and managers have a fiduciary duty to known creditors during wind-down. If assets are insufficient, creditors are paid in statutory priority order (secured creditors first). Members/shareholders absorb losses last. Delaware provides a 10-year claims bar period for unknown creditors who receive published notice of dissolution, providing long-term liability protection to former members.