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HomeCorporations CodeCh. 17§ 12656 Corporate Asset Distribution Dissolution

§ 12656 Corporate Asset Distribution Dissolution

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 12656 Corporate Asset Distribution Dissolution

When a corporation shuts down, this law tells how its stuff is given out: follow any rules in its articles or bylaws, and if there are none, split the stuff among the members based on what each member is entitled to.

Key Takeaways

  • •First, check the corporation's articles or bylaws for any instructions on how to give out assets.
  • •If the articles or bylaws are silent, the assets go to the members based on their individual rights or ownership shares.
  • •This rule applies after any other specific rules in sections 12653 and 12655.

Example

A small corporation decides to close down. Its articles say that any remaining cash will be divided equally among the three owners.

Because the articles already say how to split the cash, the owners just follow that rule and each gets an equal share. If the articles hadn't said anything, the cash would be divided according to each owner's ownership rights.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 12656 Corporate Asset Distribution Dissolution

After complying with the provisions of Section 12653 and except as otherwise provided in Section 12655, assets held by a corporation shall be disposed of on dissolution as follows: (a) If the articles or bylaws provide the manner of disposition, the assets shall be disposed of in that manner. (b) If the articles or bylaws do not provide the manner of disposition, the assets shall be distributed among the members in accordance with their respective rights therein. (Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

Last verified: January 10, 2026

Key Terms

dissolutionassetsarticles or bylawsrespective rights

Related Statutes

  • § 8717 Corporate Asset Distribution Rules
  • § 6716 Corporate Asset Dissolution Rules
  • § 6715 Corporate Asset Return Conditions
  • § 12655 Return Of Condition Assets
  • § 6717 Corporate Asset Distribution Rules

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 12656.
View Official Source