Chapter c 6 liquidating distributions
In the event of dissolution or final liquidation of the Corporation, none of the property of the Corporation nor any proceeds thereof shall be distributed or divided among any of the members, directors or officers of the Corporation or inure to the benefit of any individual.
If a corporation redeems its stock (within the meaning of section 317(b)), and if paragraph (1), (2), (3), (4), or (5) of subsection (b) applies, such redemption shall be treated as a distribution in part or full payment in exchange for the stock.
Tax advisers should be talking to their C corporation clients about the opportunities that now exist to avoid substantial future taxes.
C corporations are taxed on their taxable income at federal rates up to 35%.
A limited partner is admitted to the limited partnership in the manner provided for in the partnership agreement, effective as of the occurrence of the event that caused the last remaining limited partner to cease to be a limited partner, within 90 days or such other period as is provided for in the partnership agreement after the occurrence of the event that caused the last remaining limited partner to cease to be a limited partner, pursuant to a provision of the partnership agreement that specifically provides for the admission of a limited partner to the limited partnership after there is no longer a remaining limited partner of the limited partnership.
(5) Upon the happening of events specified in a partnership agreement; or (6) Entry of a decree of judicial dissolution under § 17-802 of this title.
If a corporation has elected to be an S corporation or a business is not operated in corporate form (e.g., partnership, limited partnership, or limited liability company (LLC)), there is only one level of taxation at the owner level, and a savings of 9.75% of taxable income, assuming the owners are individuals taxed at the highest individual rate.
This difference is even greater when taking into account state taxation.
Subject to subsection (d) of this section, this subsection shall not affect any obligation or liability of a limited partner under an agreement or other applicable law for the amount of a distribution. Distributions to the shareholder are not included in the shareholder’s gross income to the extent that the distribution does not exceed the shareholder’s basis in the stock.Because the tax consequences of distributions depend on the shareholder’s basis, it is important to keep up with changes in the shareholder’s basis over time. Notwithstanding any other provisions of these Bylaws, the Corporation shall not carry on any activities not permitted to be carried on by a Corporation exempt from Federal income tax under Section 501(c)(6) of the Internal Revenue Code (the "Code"). Any such assets not disposed of shall be disposed of by the Superior Court of the county in which the principal office of the Corporation is then located, exclusively for such purpose or to such organization or organizations, as said Court shall determine, which are organized, operated, and engage in activities substantially similar to those of the Corporation and which are then qualified for exemption from Federal income taxes as organizations described in Sections 501(c)(3) or 501(c)(6) of the Internal Revenue Code of 1986 (or corresponding provisions of any subsequent Federal tax laws) exclusively for such purpose. No part of the net earnings of the Corporation shall inure to the benefit of, or be distributable to, its Members, Directors or trustees, officers, or other private persons, except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes of the Corporation. After all liabilities and obligations of the Corporation have been paid, satisfied or discharged, or adequate provision made therefore, all remaining property and assets of the Corporation shall be transferred to International Information Systems Security Certification Consortium, Inc., a Massachusetts nonprofit corporation ("(ISC)2"), if in existence to hold in escrow for the sole purpose of transferring such funds to a new chapter entity formed to cover the geographic area authorized under the (ISC)2 Chapter Affiliation Agreement, (ISC)2 Phoenix Chapter Charter as shall at the time qualify as an exempt organization or organizations under Section 501(c)(6) of the United States Internal Revenue Code (or the corresponding provision of any future United States Internal Revenue Laws) as the Board of Directors shall determine.