ter Gt Borate acidating distributions
1 Chapter 6: Corporate Liquidating Distributions
LIQUIDATING DISTRIBUTIONS Complete liquidation vs. dissolution Effects of liquidation on shareholders Effects of liquidation on liquidating corporation Liquidation of a controlled subsidiary Special shareholder issues Debt retirement
2 LIQUIDATING DISTRIBUTIONS Complete liquidation vs. dissolution Effects of liquidation on shareholders Effects of liquidation on liquidating corporation Liquidation of a controlled subsidiary Special shareholder issues Debt retirement
Complete Liquidation VS Dissolution (1 of 3) Complete liquidation Completely cancel or redeem all of corp's stock in accordance with plan of liquidation OR One of a series of distributions in accordance with plan of liquidation 3
3 Complete Liquidation vs. Dissolution(1 of 3) Complete liquidation –Completely cancel or redeem all of corp’s stock in accordance with plan of liquidation OR –One of a series of distributions in accordance with plan of liquidation
Complete Liquidation VS Dissolution (2 of 3) Liquidation status Corporation ceases to be going concern Activities for purpose of winding up its affairs, paying debts, distributing remaining property to shareholders Retention of nominal assets does not alter liquidation status
4 Complete Liquidation vs. Dissolution(2 of 3) Liquidation status –Corporation ceases to be going concern –Activities for purpose of winding up its affairs, paying debts, & distributing remaining property to shareholders –Retention of nominal assets does not alter liquidation status
Complete Liquidation VS Dissolution (3 of 3) Dissolution of corporation A legal action that requires corporation to surrender its charter to the state Possible to liquidate corporation without dissolving it Dissolution frees corporate name for use by others 5
5 Complete Liquidation vs. Dissolution(3 of 3) Dissolution of corporation –A legal action that requires corporation to surrender its charter to the state –Possible to liquidate corporation without dissolving it –Dissolution frees corporate name for use by others