"A corporation is in the process of complete liquidation if at the time distributions are made it is engaged in winding up its affairs by realizing upon its assets, paying its debts, and distributing any remaining balance to its stockholders. ‘It differs from normal operation for current profit in that it ordinarily results in the winding up of the corporation's affairs, and there must be a manifest intention to liquidate, a continuing purpose to terminate its affairs and dissolve the corporation, and its activities must be directed and confined thereto.'"
Winding up
Definition
The settlement of debts and liquidation of assets, done with the goal of dissolving a partnership or corporation.
See: Dissolution of corporation.
Definition from Nolo’s Plain-English Law Dictionary
1) The process of liquidating or closing down a corporation, limited liability company, or partnership. Typically this involves paying off expenses and creditors, settling accounts, and collecting and distributing (to shareholders and owners) whatever assets then remain. 2) With respect to an estate or trust, gathering assets, paying debts, and distributing property to those entitled to inherit it. (See also: personal representative)
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:26 pm
Earle v. Comm'r of Internal Revenue, T.C.M. (P-H) P 45,281 (T.C. 1945) (citation omitted).
