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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.Before the final distributions of assets or cash and return or cancellation of stock, shareholders must approve a recommendation by the board of directors to liquidate and dissolve the corporation.This approval must be adopted in a resolution or meeting minutes for written proof. She is a business owner, interim CEO and author of "Solving the Capital Equation: Financing Solutions for Small Businesses." Wright has helped companies obtain more than million in financing.

Some states require a corporation to verify that final state taxes have been paid before liquidation can be considered complete.An officer must file the final tax return after liquidation is complete.Your liquidating corporation must file a 1099-DIV for each shareholder for any distributions.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.




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