How to Transfer Assets When Dissolving a Corporation

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Companies attempt to sell all merchandise before dissolving and transferring assets.
Companies attempt to sell all merchandise before dissolving and transferring assets. (Image: General Photographic Agency/Valueline/Getty Images)

Corporate assets become a consideration whenever a corporation is dissolved. The assets held by a corporate entity are first used to pay any liabilities, and then gathered for consideration of their value. Some funds are set aside for tax and liability considerations that may surface after dissolution, but the rest is on the table for transferring corporate assets to share holders. The debts a company is unable to pay are also handed over to the share holders.

Fulfill all contracts made by the company for completing projects and making purchases. Any unfulfilled business will become a liability when the corporation is dissolved.

Send notice of intent to dissolve to the state attorney's office in the state that holds the corporate headquarters. Follow all state regulations regarding assets for the type of corporation. Many states use different regulations for corporations, nonprofit companies and LLC businesses. There may be a mandatory waiting period such as 20 days before transferring corporate assets.

Gather all corporate assets and have them appraised. Set aside funding for the corporate taxes due and any possible liabilities the company may incur during dissolution.

Sell all property that is not going to be distributed to the share holders. Use these proceeds to pay debts before the corporation is dissolved. Sell any property that will be distributed to shareholders in liquid funds.

Distribute the remaining corporate assets to the shareholders with respective consideration for the percentage of ownership each holds. A shareholder with 51 percent interest in the company will receive 51 percent of the transferring corporate assets. Report the distribution of assets for tax purposes. Shareholders are responsible for taxes on assets received.

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