Explain the concepts of winding up, liquidation, and termination.
What will be an ideal response?
A dissolved corporation continues its corporate existence but may not carry on any business except as required to wind up and liquidate its business and affairs. In a voluntary dissolution, the liquidation is usually carried out by the board of directors. If the dissolution is involuntary or the dissolution is voluntary but the directors refuse to carry out the liquidation, a court appointed receiver carries out the winding up and liquidation of the corporation. Termination occurs only after the winding up of the corporation's affairs, the liquidation of its assets, and the distribution of the proceeds to the claimants. The liquidated assets are paid to claimants according to the following priority: (1) expenses of liquidation and creditors according to their respective liens and contract rights, (2) preferred shareholders according to their liquidation preferences and contract rights, and (3) common stockholders.
You might also like to view...
In the infamous Coke-New Coke taste test, 54 percent of consumers, using a blind taste test, preferred the New Coke formula to the existing formulation. This is an example of a(n) ________ marketing research method.
A. quantitative B. invalid C. qualitative D. observational E. syndicated
The U.S. Department of Labor uses ______ to describe jobs.
A. CODAP B. O*NET C. Position Description questionnaires D. GOV.JOB E. The Hay System
Under Rule 10b-5, which is true about insiders?
A) Employees at all levels in a company are insiders, as well as lawyers, accountants, and consultants even when hired only on a temporary basis. B) Officers and directors are insiders, but lawyers or accountants that are hired only on a temporary basis are not insiders. C) Agents hired on a temporary nonemployee basis to provide services to the company are not insiders. D) Officers and directors are insiders, but employees who are not officers are not insiders.
A limited partner probably will not lose the protection of limited liability when:
a. the limited partner advises a general partner concerning partnership business. b. the limited partner's name is used in the name of the partnership. c. the limited partner manages the partnership. d. no certificate of limited partnership is properly filed.