Dissolution of Your New York Corporation: Emergency Proceedings Under BCL Section 1106
In "Shareholder Disputes: The Tactical Role of 'Dissolution' When Faced with a Serious Shareholder/Partner Dispute" we discuss and review the tactical and critical role that New York Business Corporation Section 1106 affords to aggrieved shareholders involved in a dispute with his or her fellow shareholders and/or partners. Once the proprietary of Section 1106 has been evaluated with your lawyer, consideration must be given to the following procedural requirements:
Right to Commence an Order to Show Cause and Seek an Emergency Proceeding.
The greatest benefit of Section 1106 that is afforded to an "aggrieved" shareholder/partner is the ability to commence an emergency hearing and proceeding. So rather than being forced to wait weeks and even months, Section 1106 affords shareholders the right to an immediate hearing wherein the court (if the case is concerning property) is granted the jurisdiction and authority to grant a temporary restraining order. The method for obtaining this "emergency relief" is achieved by filing a motion that is known as an "order to show cause".
Dissolution in Four Weeks?
Although the dissolution process may take some time - especially in more complex cases. The benefit of section 1106 is derived from the fact that at the initial emergency hearing the court may award "injunctive relief" to preserve the assets of your business. Pursuant to section 1106 (a) the order to show cause must proscribe a proposed dissolution date to take place not less than four (4) weeks from the date of the emergency hearing/date that the court signs the order to show cause;
Pursuant to section 1106 (b) the order to show cause must proscribe a notice of dissolution to be published "at least once in each of the three weeks before the time appointed for final dissolution";
Service on State Tax Commissioner.
Pursuant to Section 1106 (c) a copy of the order to show cause must be served on the New York State tax commission and the shareholders of the corporation.