National banks may be liquidated voluntarily during the term of their charter or at the expiration of it, or the liquidation may be compulsory because of dissolution for violation of the National Bank Law, the violation being determined by a proper court in a suit brought by the Comptroller of the Currency.

Voluntary liquidation may come by vote of the owners of two-thirds of the stock. Before calling a meeting of the stockholders for this purpose, the directors should advise with the Comptroller. The shareholders should also be given the notice required by the charter for such meeting. If the stockholders vote for liquidation, this fact is certified to the Comptroller and is published for two months in New York City and also in the place where the bank is located. Creditors are notified to present notes and other claims against the bank for payment. To provide for the redemption of outstanding bank notes lawful money must be deposited within six months from date of liquidation.

The affairs of the liquidating bank pass into the hands of its shareholders for such legal disposition as may seem proper. It is usual for the shareholders to adopt a resolution providing for the appointment of a liquidating agent or committee and requiring that agent or committee to make quarterly reports to the Comptroller showing the progress of the liquidation until it is completed. If no such agent is appointed, the settlement of affairs devolves upon the directors. After a bank has gone into liquidation the powers of the officers to transact any business except that necessarily involved in winding up the bank's affairs are terminated, unless such authority is expressly conferred by the shareholders. The bank may continue to elect officers and directors for the purpose of effecting liquidation, but the stock is no longer transferable to enable the transferee to help elect or be himself a director.

A creditor of a liquidating bank has the right to enforce the individual double liability of shareholders for debts of the bank by filing in the proper United States court a bill in equity in the nature of a creditor's bill against the shareholders. Any shareholder who is dissatisfied with the way in which the liquidation is conducted has the right to go into court and ask the appointment of a receiver, just as a shareholder of any state corporation.

When the charter of a national bank has expired or is about to expire and the bank has failed to secure an extension, it proceeds to liquidation in the same manner as if the shareholders had voted to go into liquidation, and the franchise is extended for the sole purpose of liquidating. It is always best to call a meeting of the shareholders at that time to determine what action is deemed advisable for closing the bank's affairs. The fact that the charter has been permitted to expire should be certified to the Comptroller, and notice of expiration of its corporate existence must be published for two months in New York City and locally. The affairs of the bank are then liquidated in the same manner as if the shareholders had voted voluntary liquidation.