liquidation

The act or process of settling or making clear, fixed, and determinate that which before was uncertain or unascertained.
Payment, satisfaction, or collection; realization on assets and discharge of liabilities. To clear away (to lessen) a debt. Craddock-Terry Co. v. Powell, 180 Va. 242, 22 S.E.2d 30, 34. To pay or settle. In re Klink's Estate, 310 Ill.App. 609, 35 N.E.2d 684, 687.
To take over for collection. Belden v. Modern Finance Co., Ohio App., 61 N.E.2d 801, 804, 44 O.L.A. 163.
Winding up or settling with creditors and debtors. Wilson v. Superior Court in and for Santa Clara County, 2 Cal.2d 632, 43 P.2d 286, 288.
With respect to winding up of affairs of corporation, is process of reducing assets to cash, discharging liabilities and dividing surplus or loss. Occurs when a corporation distributes its net assets to its shareholders and ceases its legal existence. The settling of financial affairs of a business or individual, usually by liquidating (turning to cash) all assets for distribution to creditors, heirs, etc. It is to be distinguished from dissolution which is the end of the legal existence of a corporation. Liquidation may precede or follow dissolution, depending upon statutes.
@ one month liquidation
@ one-month liquidation
A special election available to certain shareholders of a corporation which determines how the distributions received in liquidation by the electing shareholders will be treated for Federal income tax purposes. In order to qualify for the election, the corporation must be completely liquidated within the time span of any one calendar month. I.R.C. No. 333.
@ partial liquidation
A partial liquidation occurs when some of the corporation's assets are distributed to its shareholders (usually on a pro rata basis) and the corporation continues doing business in a contracted form. Distributions of cash or property beyond the amount of earned surplus of a corporation is a partial liquidation.
@
Tax implications.
In a complete or partial liquidation of a corporation, amounts received by the shareholders in exchange for their stock are usually treated as a sale or exchange of the stock resulting in capital gain or loss treatment. Special rules apply to one month liquidations, twelve month liquidations, and the liquidation of a subsidiary.
@ twelve-month liquidation
A provision of the Internal Revenue Code that requires a corporation selling property within the 12-month period from the adoption of a plan of liquidation to its complete liquidation to recognize no gain or loss on such sales. Generally, inventory is not included within the definition unless a bulk sale occurs.
See I.R.C. No. 337
@ liquidation dividend
Act or operation in winding up affairs of firm or corporation, a settling with its debtors and creditors, and an appropriation and distribution to its stockholders ratably of the amount of profit and loss. Hellman v. Helvering, 63 App.D.C. 18, 68 F.2d 763, 765.
@ liquidation price
A price paid for property sold to liquidate a debt. Usually less than market value since there is pressure to sell or a forced sale, either of which does not usually bring the highest price
@

Black's law dictionary. . 1990.

Synonyms:

Look at other dictionaries:

  • Liquidation — Liquidation …   Deutsch Wörterbuch

  • liquidation — [ likidasjɔ̃ ] n. f. • 1416; de liquider I ♦ 1 ♦ Dr. Action de calculer le montant de sommes à régler; le règlement de ces sommes. Liquidation des dépens par le tribunal. Liquidation de l impôt : calcul des impôts à recouvrer sur chaque… …   Encyclopédie Universelle

  • liquidation — index aberemurder, assassination, cancellation, composition (agreement in bankruptcy), discharge (payment), dispatch (act of putting to death) …   Law dictionary

  • liquidation — Liquidation. s. f. v. Action par laquelle on liquide en matiere d affaires ce qui estoit embarassé & incertain. Liquidation de despens. liquidation d interests. il travaille à la liquidation de ses dettes, de son bien &c …   Dictionnaire de l'Académie française

  • Liquidation — Liq ui*da tion (l[i^]k w[i^]*d[=a] sh[u^]n), n. [Cf. F. liquidation.] The act or process of liquidating; the state of being liquidated. [1913 Webster] {To go into liquidation} (Law), to turn over to a trustee one s assets and accounts, in order… …   The Collaborative International Dictionary of English

  • liquidation — [lik΄wi dā′shən] n. a liquidating or being liquidated go into liquidation to close one s business by collecting assets and settling all debts …   English World dictionary

  • Liquidation — (lat.), die Auseinandersetzung nach beendigtem Geschäft oder nach geleisteter Dienstverrichtung; daher liquidieren, soviel wie Kosten, Gebühren etc. berechnen. Auch die Rechnung selbst heißt L. Der liquidierte Betrag wird Liquidum genannt, doch… …   Meyers Großes Konversations-Lexikon

  • Liquidation — (lat.), Kostenberechnung; Abwicklung eines aufgegebenen Geschäfts; Liquidationskassen, Liquidationsbureaus, handelstechnische Einrichtungen zur Vereinfachung der Abrechnung von Zeitgeschäften; Liquidātor, bei Auflösung von Handelsgesellschaften… …   Kleines Konversations-Lexikon

  • liquidation — the dissolution of a company, or individual; usually operations cease and assets are sold by auction; Chapter 7 is usually employed for liquidations, businesses or individuals (Glossary of Common Bankruptcy Terms) The sale of a debtor s… …   Glossary of Bankruptcy

  • Liquidation — Liquidation,die:1.⇨Auflösung(1)–2.⇨Rechnung(1) …   Das Wörterbuch der Synonyme

  • liquidation — 1570s, noun of action from L.L. liquidare (see LIQUIDATE (Cf. liquidate)); originally as a legal term in reference to assets; of inconvenient groups of persons, 1925 in communist writings …   Etymology dictionary

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