> For the complete documentation index, see [llms.txt](https://docs.contributionism.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.contributionism.io/implementation-and-organisational-lifecycle/restructuring-sale-and-dissolution.md).

# Restructuring, sale and dissolution

Major organisational changes test whether contribution rights are complete and enforceable.

An organisation should establish how these events affect its assets, obligations and governance before they occur.

## **Different forms of restructuring**

Restructuring can include:

* Merging with another organisation.
* Creating subsidiaries.
* Transferring activities.
* Selling assets.
* Selling ownership interests.
* Changing legal form.
* Closing part of the operation.

These events may have different consequences for rights. A sale of shares is not the same as a sale of the organisation’s assets.

## **Preventing avoidance through restructuring**

An organisation should not be able to move its valuable activities into a new entity while leaving contribution claims behind without appropriate treatment. Agreements may need provisions concerning:

* Successor obligations.
* Transfers of intellectual property.
* Related-party transactions.
* Changes of control.
* Material asset disposals.

The legal effectiveness of those provisions must be assessed in the relevant jurisdiction.

## **Sale proceeds**

A central question is who is entitled to the value realised in a sale. Possible claimants include:

* Creditors.
* Holders of accrued compensation.
* Current financial participants.
* Holders of capped claims.
* A trust or public body.
* Another designated residual beneficiary.

The arrangement should distinguish sale proceeds from ordinary operating surplus. If sale proceeds are excluded from participation rights without explanation, current controllers may be able to sell assets and bypass historical contributors. Conversely, automatically treating the entire sale value as a contribution dividend may conflict with creditors’ rights, legal ownership or asset restrictions.

## **Residual assets**

Temporary governance and compensation rights create an important question: Who has the residual claim after these rights have expired or all defined claims have been satisfied? Possible answers depend on the legal design. Assets may remain with the continuing organisation, pass to a designated body or be distributed under an agreed and lawful formula. The answer should be established in the governing documents. It should not be improvised by the last remaining voter.

## **Approval requirements**

A major transaction may require:

* Approval by the ordinary governing body.
* A higher voting threshold.
* Consent from affected rights holders.
* Public or regulatory approval.
* Compliance with financing covenants.

The organisation should obtain sufficient information about valuation and alternatives.

## **Insolvency**

Insolvency changes the legal context. The organisation may be unable to pay all claims, and legal priorities can override its preferred internal distribution policy. Contribution values do not automatically determine creditor ranking. Contributors should understand that:

* Some claims may receive partial payment.
* Some may receive nothing.
* Equity-like participation is not equivalent to secured debt.
* Directors and officers may acquire additional duties or restrictions.

## **Orderly dissolution**

Where an organisation closes while solvent, it should:

1. Stop accepting unsupported commitments.
2. Identify assets and obligations.
3. Collect outstanding receivables.
4. Settle claims according to law and agreement.
5. Determine the treatment of remaining assets.
6. Close governance and contribution records appropriately.
7. Retain required records.

Future participation opportunities will end, but accrued obligations still require proper treatment.

## **Intellectual property and shared resources**

Closure rules should identify what happens to:

* Software.
* Designs.
* Trademarks.
* Patents.
* Customer data.
* Community assets.
* Openly licensed work.

Not every asset can be sold or distributed without restriction.

## **Continuity of evidence**

Contributors may need records after the organisation closes. The dissolution plan should identify who retains records, how legitimate requests are handled and how personal information is protected.