Liquidating a company in sydney
i) According to Interpretation Bulletin IT-126R2, Revenue Canada considers a company to be wound up if it has followed the procedures for winding up and dissolution as set out by the appropriate winding-up or companies must have been completed by the subsidiary corporation before the rollover will take effect.However, it is common for the final certificate of dissolution to not be obtained until after the subsidiary's business has effectively been terminated.After using Interactive Brokers for a number of years, I feel that it’s a good a time to write a review on the popular online discount brokerage.
Yet, regardless of differences in motivation and mechanics, corporate reorganizations are almost always characterized by a transfer of property between taxpayers, a transfer which is generally caught by the deemed disposition rule of the This principle holds that where a taxpayer disposes of property to a person with whom he or she does not deal at arm's length, the taxpayer is deemed to have received proceeds of disposition equal to the fair market value of the property.
If the corporation has issued shares but lacks both property and liabilities, then it may be dissolved by a special resolution of its shareholders.
On the other hand, if it does have property or liabilities, then it may be dissolved by special resolution of the shareholders of each of its classes of issued shares, so long as it discharges its liabilities prior to dissolution.
Therefore, the application of the deemed disposition rule to a reorganization of business affairs has the potential to generate taxable gains.
Such a result may be both punitive and unjust, however, particularly in circumstances where the transferor and the transferee are effectively the same party, as in the example of when a sole proprietor creates a corporation and subsequently transfers his/her assets to it.