Revised Corporation Code Practice Test

The term 'dissolution' in corporate law specifically refers to the process of legally dissolving a corporation's existence. This formal process marks the end of a corporation's life as a legal entity and involves the winding up of its affairs, including settling debts and distributing any remaining assets to shareholders. It is an important legal procedure that ensures that all obligations are fulfilled and that the corporation is properly removed from the records of the state.

In corporate law, dissolution can occur voluntarily, typically by a decision of the corporation's board of directors or shareholders, or involuntarily, through actions taken by regulatory authorities, such as failure to comply with legal requirements. This definition captures the complete end of a corporation's lifecycle, making it clear why this concept is pivotal in understanding corporate governance and legal compliance.

The other options involve different concepts that do not align with the specific definition of dissolution—partnership termination relates to a different type of business structure, the sale of assets is a transaction rather than an ending of existence, and merging with another corporation involves combining entities rather than ending one.