This most often involves transferring funds to the state for safekeeping until the shareholder comes forward.State laws require corporations that have any degree of liquidity after paying creditors and satisfying tax obligations to return excess funds to shareholders.An asset sale liquidation is essentially the sale of all assets in exchange for the outstanding stock held by shareholders.
This is calculated as the difference between the fair market value of the assets and either the monies actually received for the assets or the depreciated value of the assets distributed to shareholders.
In general, a liquidation plan outlines a corporation’s promise to return excess assets to shareholders as specified in state regulations and identifies the date shareholders cease to have rights beyond receiving a final distribution.
In addition, a liquidation plan outlines procedures for dealing with distributions when the shareholder cannot be located.
Shareholders will calculate the capital loss on their shares as the difference between their share investment and the fair market value of the assets they received.
If your corporation liquidates as part of an acquisition via asset sale by another company, then your corporation will need to take additional steps.