Which term best describes the process of ending a corporation's legal existence?

• A. Liquidation
• B. Merger
• C. Dissolution
• D. Incorporation

Answer: (C)

Ending a corporation’s legal existence is called dissolution. This is the formal act that terminates the corporation’s authority to operate, cancels its charter, and removes it from the state’s official records after the required steps—such as filing dissolution papers and settling remaining obligations—are completed. Once dissolution is in motion, the entity generally proceeds to liquidation, which is the winding-up process: collecting assets, paying debts, and distributing any remaining assets to shareholders. A merger, by contrast, involves one company absorbing another, with the surviving entity continuing to exist and the absorbed one ceasing to exist as a separate entity. Incorporation is the creation of a new corporation, not its end.