This website uses cookies to ensure you have the best experience. Learn more

Liquidation And Dissolution Essay

834 words - 4 pages

Liquidation and Dissolution

Catricia K. Collins

Professor W. Powell

Advanced Federal Taxation

Accounting 317

August 22, 2012

Liquidation and Dissolution
"Complete liquidation" is a term not defined by the Code. The regulations under IRC section 332 suggest that the status of liquidation exists when the corporation ceases to be a going concern and its activities are merely for the purpose of winding up its affairs, paying its debts, and distributing any remaining balance to its shareholders. The Tax Court applies a three-pronged test to determine whether a ...view middle of the document...

First step is to hold a meeting of corporation's board of directors in which they need to propose a resolution for business closing ("Termination Proposal"). A vote must be taken and the minutes of the meeting must be recorded and retained in the corporate records. Then that proposed dissolution action must also be approved by majority shareholders. Second step is filing Articles of Dissolution with the secretary of state. The procedure varies from state to state - in some states this is done with a simple certificate while others require a more complex process. Lastly, once you get approval from the state to dissolve your corporation/LLC, then company assets need to be distributed to its shareholders/members.
The company must notify each director and shareholder, whether entitled to vote or not, of the proposed dissolution meeting. The notice must clearly state that the purpose of the meeting is to consider dissolving the entity. The corporation/LLC will be withdrawn and its existence ended on the date the Certificate of Dissolution is filed and approved by the State. The Business Corporation Law does not permit the effective date of dissolution to be other than the date of filing of the Certificate of Dissolution by the State. The Certificate of Dissolution must be signed by an officer, director, attorney-in-fact or a duly authorized person. The name and title of the signer must be typed or printed opposite the signature.(
A fine line exists between definitions of a corporate liquidation and dissolution. But for tax purposes, the defining line can make a big difference. Witness the situation described in recent letter from the...

Other Papers Like Liquidation And Dissolution

Movie Analysis Other People’s Money

756 words - 4 pages 1. It is about corporate takeover and liquidation business and it is common practice in real business world, but why is it so problematic? What moral issues emerge in the movie? Answer: Yes, it is about corporate takeover. There is a corporate raider, Garfield Investment, who wants profit by buying the New England Wire and Cable’s stocks and selling it on higher price. They knew that the company is not making profit because of the lowest

Bank for International Settlements Essay

596 words - 3 pages promote central bank cooperation in general. The reparations issue quickly faded, focusing the Bank's activities entirely on cooperation among central banks and, increasingly, other agencies in pursuit of monetary and financial stability. As a result of allegations that the BIS had helped the Germans loot assets from occupied countries during World War II, the United Nations Monetary and Financial Conference recommended the "liquidation of the

Business Entities, Laws, and Regulations

1643 words - 7 pages group chooses to dissolve the partnership in the future all partners must agree to the liquidation and dissolution of the partnership unless otherwise stated in the partnership agreement. Upon the liquidation of assets of the partnership creditors must be compensated first, and then the remaining assets will be divided among the partners according to the partnership agreement or capital contribution if there is no agreement. Then the partners will

Business Law Corporations

520 words - 3 pages Torts and Crimes o Torts ▪ In the scope of the business/corp o Crimes ▪ Joint and several liability between the corp and officer ▪ Anti-trust laws ▪ Environmental laws • Merger o Shareholders get to vote • Consolidation • Liquidation • Dissolution o Nonjudicial dissolution ▪ Voluntary by the corporation itself o Involuntary Judicial dissolution ▪ Dissolved b/c of crimes o Administrative ▪

Partnership Agreement

1710 words - 7 pages required to have under the partnership act. These books and records shall be availed to any Partner for inspection and audit upon request. 13. Dissolution, Liquidation and Termination. (a) Dissolution. The Partnership shall stand dissolved if any of the following happens; 1, 31st October 2012 2, Bankruptcy 3. Legal incapacity of the general partner or other event which would legally prohibit him from carrying out his duties

Law On Partnership

8779 words - 36 pages partner assign their right to a person who will assume their debt 5. after wrongful dissolution, remaining partners continue the business without liquidation 6. when partner expelled and remaining partners continue the business without liquidation * liability of third person becoming a partner in the partnership continuing the business to the creditors of the dissolved partnership shall be satisfied out of the partnership property ONLY G.R

Winding Up

1174 words - 5 pages members in proportion to their shareholding in the company. The winding up of the company is also called the ‘liquidation’ of the company. The process of winding up begins after the Court passes the order for winding up or a resolution is passed for voluntary winding up. The company is dissolved after completion of the winding up proceedings. On the dissolution, the company ceases to exist. So, the legal procedure by which the existence of an

Lit1 Task1

3451 words - 14 pages . A filing of bankruptcy or death of one of the partners automatically dissolves the partnership. Depending upon the state in which the business operates a dissolution and liquidation form may need to be filed. Creditors, contractors and customers need to be notified of the dissolution. · Location: When a general partnership expands or relocates no additional paperwork need be filed or legal entities created. State taxes will still be assessed

Business Courses

3046 words - 13 pages MASENO UNIVERSITY ABA 302:- COMPANY LAW WINDING UP DAVE LUNG’AHO SIGANGA This is the legal process by which a company’s legal existence is brought to an end. It is carried through by a person known as a liquidator who wraps up the company operations by taking control of the Company, collecting the company’s assets, pays the Company’s debts, and then distributes the surplus among the members of the company. The liquidation process involves inter

Ethiopian Law Regarding Business Organizations: Analysis on Selected Questions

1582 words - 7 pages (15) applicable law for matters not contained in the partnership agreement (16) process of dispute resolution (17) dissolution and liquidation (18) amendment procedure of the articles of association 2, Discuss at least eight points of differences between partnership and company. Answer Distinction between a Company and a Partnership N o Basis of difference Company Partnership 1 Legal Status 2 Minimum number of members is a

Articles of Asso

2219 words - 9 pages advances which may be granted to a Member and the conditions for the grant of the same ; (l) the right of any Member to obtain information relating to general business of the company ; (m) the basis and manner of distribution and disposal of funds available after meeting liabilities in the event of dissolution or liquidation of the Producer Company ; (n) the authorisation for division, amalgamation, merger, creation of subsidiaries and the

Related Essays

Liquidation And Dissolution Paper

1273 words - 6 pages Liquidation and Dissolution The economy has made an impact on employees lost jobs, and companies who have to liquidate assets into cash due because they do not have enough profit or revenue in a company. Some company’s can survive in this tough economy but some companies may face liquidation or dissolution. The proceeds from the liquidation will help pay its outstanding obligations set forth by the court before the company goes out of

Liquidation Vs. Dissolution Essay

1070 words - 5 pages Liquidation vs. Dissolution Myron D. Roberts Strayer University Advanced Federal Taxation ACC 317 Professor Sondra Smith September 7, 2012 In this paper, I will identify the differences between when a corporation liquidates and when it is dissolved. Companies no longer viable often have no alternative but to cease operations. When a company terminates its operation, it goes through a process known variously as liquidation and

Insolvency Proceeding In Nepal Essay

1056 words - 5 pages of NDB. Generally practiced steps related to the insolvency are provided below and major proceedings held in case of NDB are linked with them as follows. 1. Administration When a company is trapped into financial trouble, either it voluntarily tightens its administration or the regulating body gets hold of it. This is first and most safe step to protect a company from dissolution or liquidation. The major objective behind holding the

Jaewashere Essay

897 words - 4 pages Related Articles * Time to Modernize Tax Rules on Business Cell Phones * Another Growth Company, And They Don’t Board Up Houses * Capital Gains Tax Rate Going Up or Down for 2010? Sponsored Links * Liquidation * Wood Flooring Liquidators Dissolving a corporation can be an extremely complicated process. For a corporation to be considered properly dissolved, the following steps are required