N.Y. Laws » CHAPTER Business Corporation / ARTICLE Non-judicial Dissolution
New York Consolidated Laws

N.Y. Business Corporation Law § 1005 (2026)

Procedure after dissolution

✓ current as of May 2026
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§ 1005. Procedure after dissolution.
  (a) After dissolution:
  (1) The corporation shall carry on no business except for the purpose
of winding up its affairs.
  (2) The corporation shall proceed to wind up its affairs, with power
to fulfill or discharge its contracts, collect its assets, sell its
assets for cash at public or private sale, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its
business.
  (3) After paying or adequately providing for the payment of its
liabilities:
  (A) The corporation, if authorized at a meeting of shareholders by a
majority of the votes of all outstanding shares entitled to vote thereon
may sell its remaining assets, or any part thereof, for shares, bonds or
other securities or partly for cash and partly for shares, bonds or
other securities, and distribute the same among the shareholders
according to their respective rights. In the case of a sale under this
subparagraph where the consideration is in whole or in part other than
cash, any shareholder, entitled to vote thereon, who does not vote for
or consent in writing to such sale, shall, subject to and by complying
with the provisions of section 623 (Procedure to enforce shareholder's
right to receive payment for shares), have the right to receive payment
for his shares. Section 909 (Sale, lease, exchange or other disposition
of assets) is not applicable to a sale of assets under this paragraph.
  (B) The corporation, whether or not it has made a sale under
subparagraph (A), may distribute any remaining assets, in cash or in
kind or partly each, among its shareholders according to their
respective rights.
  (b) When there are no shareholders, upon dissolution all subscriptions
for shares shall be cancelled and all obligations of the corporation to
issue shares or of the subscribers to pay their subscriptions shall
terminate, except for such payments as may be required to enable the
corporation to pay its liabilities.
  (c) Upon the winding up of the affairs of the corporation, any assets
distributable to a creditor or shareholder who is unknown or cannot be
found, or who is under disability and for whom there is no legal
representative, shall be paid to the state comptroller as abandoned
property within six months from the date fixed for the payment of the
final liquidating distribution, and be subject to the provisions of the
abandoned property law.
Notes of Decisions
Cited in 70 cases (11 in the last 5 years), 1985–2025 · leading case: Lorisa Capital Corp. v. Gallo, 119 A.D.2d 99 (N.Y. App. Div. 1986).
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Lorisa Capital Corp. v. Gallo, 119 A.D.2d 99 (N.Y. App. Div. 1986). · cites it 3× “This rule is qualified by statute to provide that a corporation retains a limited de jure existence for the purpose of winding up (Business Corporation Law § 1005 [a] [1]; § 1006).”
172 East 122 Street Tenants Ass'n v. Schwarz, 537 N.E.2d 1281 (N.Y. 1989). · cites it 4× “The court noted that a dissolved corporation is prohibited from carrying on any business "except for the purpose of winding up its affairs” (Business Corporation Law § 1005 [a] [1]) and thus possesses only limited power "to fulfill or discharge its contracts, collect its assets,…”
Tedesco v. A.P. Green Indus., Inc., 864 N.E.2d 65 (N.Y. 2007). · cites it 2× “Discussion Business Corporation Law §§ 1005 and 1006 govern the capacity of a dissolved corporation to bring suit.”
Greater Bright Light Home Care Servs., Inc. v. Jeffries-El, 151 A.D.3d 818 (N.Y. App. Div. 2017). “A dissolved corporation may not carry on new business (see Business Corporation Law § 1005 [a] [1]) and no longer has the right to commence an action in the courts of this State, except in specific circumstances permitted by statute (see MMI Trading, Inc.”
Citimortgage, Inc. v. Espinal, 134 A.D.3d 876 (N.Y. App. Div. 2015). “Contrary to the appellant’s contention, the mortgage was not invalid merely because it was issued in the name of a corporation which no longer existed in its own right, since a dissolved corporation has the authority to discharge all its contracts, and collect all its assets…”
Lots 4 Less Stores, Inc. v. Integrated Props., Inc., 152 A.D.3d 1181 (N.Y. App. Div. 2017). “Following dissolution, a corporation may continue to function for the purpose of winding up its affairs, which includes the ability to transfer shares and sell assets (see Business Corporation Law §§ 1005 [a] [2]; 1006 [a] [3]; Matter of 172 E.”
Lewis v. Schwartz, 119 A.D.2d 116 (N.Y. App. Div. 1986). · cites it 3× “In this connection it is urged that, although 2197 7th Avenue while dissolved could "carry on no business except for the purpose of winding up its affairs” (Business Corporation Law § 1005 [a] [1]), the right to apply for release of the subject building was an "asset” in the…”
80-02 Leasehold, LLC v. CM Realty Holdings Corp., 123 A.D.3d 872 (N.Y. App. Div. 2014). · cites it 2× “v Gallo, 119 AD2d 99, 109 [1986]; Business Corporation Law § 1005 [a] [1]).”
Cenlar FSB v. Glauber, 188 A.D.3d 1141 (N.Y. App. Div. 2020). “That the original mortgage creditor assigned the mortgage after its dissolution did not affect the validity of the assignment, since a corporation may dispose of its assets in the process of winding up its affairs ( see Business Corporations Law § 1005). Further, we agree with…”
Moran Enter., Inc.v. Hurst, 66 A.D.3d 972 (N.Y. App. Div. 2009). “A dissolved corporation is prohibited from carrying on new business (see Business Corporation Law § 1005 [a] [1]) and does not enjoy the right to bring suit in the courts of this state, except in the limited respects specifically permitted by statute (see Vantrel Enters.”
Noise in the Attic Prods., Inc. v. London Records, 10 A.D.3d 303 (N.Y. App. Div. 2004). “It is one thing for the court to have concluded that NITA’s dissolution did not preclude it from pursuing a claim against SNP for its own share of record royalties on a “winding up” theory (see Business Corporation Law § 1005 [a] [2]).”
Singer v. Riskin, 137 A.D.3d 999 (N.Y. App. Div. 2016). “Turning first to the issue of capacity, although the appellants submitted evidence that the Singer corporations were dissolved before the commencement of this action, the Supreme Court properly determined that the appellants failed to establish, prima facie, that the action does…”
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N.Y. Business Corporation Law § 1005(a)(2): 1 case
Matter of ANO, Inc. v. Goldberg, 2023 NY Slip Op 02508 (N.Y. App. Div. 2023).
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