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On liquidating

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Liquidation refers to the procedure in which a limited company is brought to a close by an appointed Insolvency Practitioner (Liquidator).The company’s assets are then sold (liquidated) and any realisation of revenue is redistributed in order of priority.A fine line exists between definitions of a corporate liquidation and dissolution.But for tax purposes, the defining line can make a big difference.The company is struck-off the registrar of companies and this is known as dissolution, which is the final stage of the liquidation process.There are two voluntary liquidation procedures and one compulsory procedure.The Syrian foreign minister denied the government’s involvement in the Idlib incident, saying it had never nor would it ever use chemical weapons on either civilians or terrorists operating in the country.The Russian Defense Ministry said on Wednesday that the airstrike near Khan Shaykhun by the Syrian air force hit a terrorist warehouse that stored chemical weapons slated for delivery to Iraq, and called on the UN Security Council to launch a proper investigation into the incident.

Compulsory liquidation is usually initiated by a creditor that is looking to force a company into closure via a court order.Company management, however, was blissfully unaware of this development and continued to file the business’s federal corporate income tax return and pay all federal income taxes.Eventually, company officers learned of their plight and reincorporated the business in the same state.Witness the situation described in recent letter from the Internal Revenue Service (LTR 200806006, November 7, 2007), which addresses a seeming anomaly related to the tax code.The anomaly is corporate dissolution without liquidation.If you acquired stock in the same corporation in more than one transaction, you own more than one block of stock in the corporation.