State business codes specify the procedures corporate managers must follow to execute the legal termination and asset liquidation of an S corporation. Obtain a vote and decision to dissolve the S corporation from shareholders.
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A securities investor protection corporation (SIPC) is a nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy.
Members to the SIPC include all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members.
For the most part, such a distribution is made from the company's capital base, and as a return of capital, is typically not taxable for shareholders.
This distinguishes a liquidating dividend from regular dividends, which are issued from the company's operating profits or retained earnings. A liquidating dividend may be made in one or more installments. S., a corporation paying out liquidating dividends will issue to its shareholders a Form 1099-DIV showing the amount of the distribution.