Virginia Law

Article 8. Dissolution.

A business trust organized under this chapter is dissolved and its affairs shall be wound up upon the happening of the first to occur of the following events:

1. At the time or on the happening of any events specified in writing in the articles of trust or a governing instrument;

2. Upon the unanimous written consent of the beneficial owners;

3. The entry of a decree of judicial dissolution under § 13.1-1235;

4. Automatic cancellation of its existence pursuant to § 13.1-1238.1; or

5. Involuntary cancellation of its existence pursuant to § 13.1-1238.2.

2002, c. 621; 2008, cc. 101, 588, 770; 2009, c. 167.

A. On application by or for a beneficial owner, the circuit court of the city or county in which the registered office of the business trust is located may decree dissolution of a business trust if it is not reasonably practicable to carry on the business in conformity with the articles of trust and any governing instrument.

B. When the winding up of the affairs of the business trust has been completed, the court shall so advise the Commission, which shall enter an order of cancellation of the business trust's existence.

2002, c. 621; 2008, c. 101.

A. The winding up of a business trust shall be completed when all debts, liabilities, and obligations of the business trust have been paid and discharged or reasonably adequate provision therefor has been made, and all of the remaining property and assets of the business trust have been distributed to the beneficial owners.

B. Unless otherwise provided in the articles of trust or in the governing instrument, upon the dissolution of a business trust, the trustees may wind up the business trust's affairs; however, the circuit court of the city or county in which the registered office of the business trust is located, on cause shown, may wind up the business trust's affairs on application of any beneficial owner, his legal representative, or assignee.

2002, c. 621; 2008, c. 101.

Upon the winding up of a business trust, the assets of the business trust shall be distributed as follows:

1. To creditors, including beneficial owners who are creditors, to the extent permitted by law, in satisfaction of liabilities of the business trust, other than for distributions to beneficial owners under § 13.1-1227;

2. Unless otherwise provided in the articles of trust or in the governing instrument, to the beneficial owners and former beneficial owners in satisfaction of liabilities for distributions under § 13.1-1227; and

3. Unless otherwise provided in the articles of trust or in the governing instrument, to the beneficial owners in the proportions in which the beneficial owners share in distributions.

2002, c. 621.

A. When the affairs of a business trust have been wound up pursuant to § 13.1-1236, it shall file articles of cancellation with the Commission. The articles shall set forth:

1. The name of the business trust;

2. The identification number issued by the Commission to the business trust;

3. The effective date of its certificate of trust;

4. A statement that the business trust has completed the winding up of its affairs; and

5. Any other information the trustees determine to include therein, including the reason for filing the articles of cancellation.

B. If the Commission finds that the articles of cancellation comply with the requirements of law and that all required fees have been paid, it shall by order issue a certificate of cancellation, canceling the business trust's existence. Upon the effective date of such certificate, the existence of the business trust shall cease, except for the purpose of suits, other proceedings, and appropriate actions by trustees and beneficial owners as provided in this chapter.

2002, c. 621; 2008, c. 101; 2013, c. 25.

A. Whether or not the notice described in subsection B of § 13.1-1254 is mailed, if any business trust fails to pay its annual registration fee on or before December 31 of the year assessed, its existence shall be automatically canceled as of that day.

B. If any business trust whose registered agent has filed with the Commission a statement of resignation pursuant to § 13.1-1222 fails to file a statement of change pursuant to § 13.1-1221 within 31 days after the date on which the statement of resignation was filed, the Commission shall mail notice to the business trust of impending cancellation of its existence. If the business trust fails to file the statement of change before the last day of the second month immediately following the month in which the impending cancellation notice was mailed, the existence of the business trust shall be automatically canceled as of that day.

C. The properties and affairs of a business trust whose existence has been canceled pursuant to this section shall pass automatically to its trustees as trustees in liquidation. The trustees shall then proceed to (i) collect the assets of the business trust; (ii) sell, convey, and dispose of such of its properties as are not to be distributed in kind to its beneficial owners; (iii) pay, satisfy, and discharge its liabilities and obligations; and (iv) do all other acts required to liquidate its business and affairs. After paying or adequately providing for the payment of all its obligations, the liquidating trustees shall distribute the remainder of its assets, either in cash or in kind, among its beneficial owners according to their respective rights and interests.

D. No beneficial owner, trustee, or other agent of a business trust shall have any personal obligation for any liabilities of the business trust, whether such liabilities arise in contract, tort, or otherwise, solely by reason of the cancellation of the business trust's existence pursuant to this section.

2008, c. 101; 2013, c. 25.

A. The existence of a business trust may be canceled involuntarily by order of the Commission when it finds that the business trust has:

1. Continued to exceed or abuse the authority conferred upon it by law;

2. Failed to maintain a registered office or a registered agent in the Commonwealth as required by law;

3. Failed to file any document required by this chapter to be filed with the Commission; or

4. Been convicted for a violation of 8 U.S.C. § 1324a (f), as amended, for actions of its trustees or beneficial owners authorized to act on the behalf of a business trust constituting a pattern or practice of employing unauthorized aliens in the Commonwealth.

B. Before entering any such order, the Commission shall issue a rule against the business trust giving it an opportunity to be heard and show cause why such an order should not be entered. The Commission may issue the rule on its own motion or on motion of the Attorney General.

C. The properties and affairs of a business trust whose existence has been canceled pursuant to this section shall pass automatically to its trustees as trustees in liquidation. The trustees shall then proceed to (i) collect the assets of the business trust; (ii) sell, convey, and dispose of such of its properties as are not to be distributed in kind to its beneficial owners; (iii) pay, satisfy, and discharge its liabilities and obligations; and (iv) do all other acts required to liquidate its business and affairs. After paying or adequately providing for the payment of all its obligations, the liquidating trustees shall distribute the remainder of its assets, either in cash or in kind, among its beneficial owners according to their respective rights and interests.

D. Any business trust convicted of the offense listed in subdivision A 4 shall immediately report such conviction to the Commission and file with the Commission an authenticated copy of the judgment or record of conviction. A business trust whose existence is canceled pursuant to subdivision A 4 shall not be eligible for reinstatement for a period of not less than one year.

2008, c. 101; 2009, c. 167.

A. A business trust that has ceased to exist may apply to the Commission for reinstatement within five years thereafter, unless the cancellation was by order of the Commission (i) entered pursuant to subdivision A 1 of § 13.1-1238.2 or (ii) entered pursuant to § 13.1-1235 and the circuit court's decree directing dissolution contains no provision for reinstatement of the existence of the business trust.

B. To have its existence reinstated, a business trust shall provide the Commission with the following:

1. An application for reinstatement, which may be in the form of a letter, that includes the identification number issued by the Commission to the business trust;

2. A reinstatement fee of $100;

3. All annual registration fees and penalties that were due before the business trust ceased to exist and that would have been assessed or imposed to the date of reinstatement if the business trust's existence had not been canceled;

4. If the name of the business trust does not comply with the provisions of § 13.1-1214 at the time of reinstatement, articles of amendment to the articles of trust to change the business trust's name to a name that satisfies the provisions of § 13.1-1214, with the fee required by this chapter for the filing of articles of amendment; and

5. If the business trust's registered agent has filed a statement of resignation and a new registered agent has not been appointed, a statement of change pursuant to § 13.1-1221.

C. If the business trust complies with the provisions of this section, the Commission shall enter an order of reinstatement of existence. Upon entry of the order, the existence of the business trust shall be deemed to have continued from the date of the cancellation as if the cancellation had never occurred, and any liability incurred by the business trust or a beneficial owner, trustee or other agent after the cancellation and before the reinstatement is determined as if cancellation of the business trust's existence had never occurred.

2002, c. 621; 2004, c. 601; 2008, c. 101; 2013, c. 25.

A. Except to the extent otherwise provided in the articles of trust or in the governing instrument of the business trust, a series established in accordance with § 13.1-1219 may be dissolved and its affairs wound up without causing the dissolution of the business trust or any other series. Unless otherwise provided in the articles of trust or in the governing instrument of the business trust, the dissolution, winding up, liquidation or termination of the business trust or any series thereof shall not affect the limitation of liability with respect to a series established in accordance with §§ 13.1-1219 and 13.1-1231. A series established in accordance with § 13.1-1219 is dissolved and its affairs shall be wound up at the time or upon the happening of events specified in the governing instrument of the business trust. Except to the extent otherwise provided in the articles of trust or in the governing instrument of a business trust, the death, incapacity, dissolution, termination or bankruptcy of a beneficial owner of such series shall not result in the termination or dissolution of such series and such series may not be terminated or revoked by a beneficial owner of such series or other person except in accordance with the terms of the governing instrument of the business trust.

B. Upon dissolution of a series of a business trust, the persons who under the governing instrument of the business trust are responsible for winding up such series' affairs may, in the name of the business trust and for and on behalf of the business trust and such series, take all actions with respect to the series as are permitted under § 13.1-1236 and shall provide for the claims and obligations of the series and distribute the assets of the series as provided under § 13.1-1237. Any person, including any trustee, who under the governing instrument is responsible for winding up such series' affairs and who has complied with § 13.1-1237 shall not be personally liable to the claimants of the dissolved series by reason of such person's actions in winding up the series.

2002, c. 621.