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The term defunct refers to something that no longer exists or operates. In a business context, a defunct corporation is one that has stopped all activities and is effectively out of business. However, a company is not classified as defunct if it is in the process of winding up its affairs, which involves settling debts and liquidating assets. In many jurisdictions, it is possible for a defunct corporation to be revived, although this process can be complex and varies by location.
Table of content
Legal Use & context
The term "defunct" is commonly used in corporate law and business regulations. It applies primarily in the context of:
Corporate dissolution
Bankruptcy proceedings
Business licensing and registration
Users may encounter this term when dealing with legal forms related to business operations, such as dissolution documents or revival applications. US Legal Forms offers templates that can help users navigate these processes effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Here are a couple of examples:
Example 1: A tech startup that has not conducted any business for over two years and has not filed for bankruptcy is considered defunct.
Example 2: A local restaurant that closed its doors and has not filed for dissolution is also classified as defunct (hypothetical example).
State-by-state differences
Examples of state differences (not exhaustive):
State
Defunct Status Procedure
California
Requires filing a Certificate of Dissolution.
New York
Must file a Certificate of Dissolution with the state.
Texas
Corporations can be declared defunct after failing to file annual reports.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Inactive
A business that has not conducted operations but may still be registered.
Inactive businesses can often be revived more easily than defunct ones.
Dissolved
A business that has legally ceased operations and is no longer registered.
Dissolved entities are officially terminated, while defunct ones may still exist legally.
Common misunderstandings
What to do if this term applies to you
If you find yourself dealing with a defunct corporation, consider the following steps:
Determine whether the corporation can be revived by checking state laws.
Gather necessary documentation, such as financial records and previous filings.
Use US Legal Forms to access templates for dissolution or revival as needed.
If the situation is complex, consult a legal professional for tailored advice.
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