A collapsible corporation is a type of corporation established for a specific, short-term purpose. These corporations are created with the intention of being dissolved once their goal is achieved. For example, a collapsible corporation might be formed to acquire a piece of real estate, and once the acquisition is completed, the corporation is dissolved.
Collapsible corporations are primarily used in business and corporate law. They are relevant in situations where a temporary business structure is needed, such as for real estate transactions, joint ventures, or special projects. Users may find legal forms helpful for establishing such corporations, as they can streamline the process and ensure compliance with state regulations.
Here are a couple of examples of abatement:
Example 1: A real estate developer forms a collapsible corporation to purchase and develop a commercial property. Once the development is complete and the property is sold, the corporation is dissolved.
Example 2: A group of investors creates a collapsible corporation to fund a film project. After the film is produced and distributed, the corporation is dissolved. (hypothetical example)
| State | Key Variations |
|---|---|
| California | Requires specific filing for temporary corporations. |
| New York | Has distinct rules for the dissolution process of collapsible corporations. |
| Texas | Allows for streamlined formation and dissolution processes. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Limited liability company (LLC) | A flexible business structure that protects owners from personal liability. | LLCs can be permanent, whereas collapsible corporations are temporary. |
| Joint venture | A partnership between two or more parties for a specific project. | Collapsible corporations are separate legal entities, while joint ventures are often not. |
If you are considering forming a collapsible corporation, it's advisable to:
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