CORPORATIONS-EXTENT OF POWERS TO DISPOSE OF PROPERTY IN WINDING UP ITS AFFAIRS UNDER STATUTES EXTENDING CORPORATE EXISTENCE

According to the common law a dissolved corporation ceased to exist for all purposes. Whether the dissolution was voluntary or involuntary, the effect of the dissolution was to deprive the corporation of all powers either de jure or de facto. It was necessary, therefore, that corporations facing dissolution proceed without delay toward a final liquidation and distribution of assets. Disregarding the old theory that personal property of dissolved corporations escheated to the state, and that its real estate reverted to the original granter or his heirs, and that debts due the corporation were extinguished, it is still apparent that hurried liquidation is not conducive to a realization of the true value of assets.

Where the corporation could foresee dissolution, for example, the expiration of its charter at a time certain, and prudently initiated its winding up procedure in adequate time for a judicious disposal of its assets, it had to sacrifice a valuable part of its remaining corporate life which might otherwise have been used in carrying on the business for which it was formed.