Liquidation and Winding-Up Process
Liquidation and Winding-Up Process
- Liquidation and Winding-Up is the
process of dissolving a corporation. First the corporation must cease conducting
business (no soliciting new business) and notify its creditors. To the extent
possible, it must fulfill its existing contracts. The corporation must also
collect its accounts receivable and other assets owed to it and sell its assets
that have been not pledged as collateral for its outstanding debts. From the
proceeds, it pays its creditors. If any cash or other assets remain after paying
its debts, then it next distributes what remains to its preferred shareholders
and finally to its common shareholders.
The corporation remains responsible for making any filings required by state and federal law.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
The corporation remains responsible for making any filings required by state and federal law.
Disclaimer: The foregoing is intended to provide general information and may not be suitable in specific instances. The glossary information is not intended to be exhaustive, but rather to illustrate typical considerations. The material is provided with the understanding that it is not legal, accounting, tax or any other professional advice.
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