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Fontana California online Form 966: What You Should Know
If your corporation is going through financial crisis, this is certainly the form that you want to file. In some cases, they will accept Form 8923 instead of Form 966. Other than that, the other main things needed are listed below. The corporate form must say “company.” The corporation must contain at least 75 votes for dissolution and 75 votes for liquidation. The corporation must have at least 5,000 in assets and a cash value of no more than 15,000. How long the form is effective: One year from the date the Form 966 is filed. This applies to the corporate form only. In case you intend to file a separate shareholder dissolution form, please refer to that. Dissolution Form: The corporate dissolution form (966) of a corporation is filed with the California Department of Motor Vehicle (“DMV”) in the county where the corporation is located. There is a 10 fee (200 if filed with DMV). What happens to the assets: Most corporation assets are immediately placed in the state “Distribution Fund for Dissolved Private Corporations and Trusts” in the treasurer's office of the county where the corporation was chartered. All corporate assets may be frozen for up to 2 years. However, corporate assets remain taxable income to the shareholders. If a shareholder owns more than 5,000 shares of stock, the shareholder must sell shares at the current price, plus or minus 5%, or the stock value, whichever is lower. There can be a maximum of 5% on the amount of stock sold. When a shareholder sells out of this amount, he or she must pay a 30% statutory tax and a 2,000 non-refundable administrative fee. If the board of directors is composed exclusively of directors that are not also stockholders, the corporation must distribute its shares to shareholders, either as a dividend or share repurchase. Both the dividend and share repurchase must be to a shareholder of record. The dividend can be paid in cash, as in the case of dividend shares, or in the form of a check, with the amount to be determined each year by the corporation's board of directors, after consultation with a certified public accountant. The amount of the dividends and share repurchases may be reduced by a shareholder's charitable contributions, but must be repaid by the corporation within two years from the date of the distribution, unless a shareholder meets the requirements for an accelerated recovery of the return of the payment.
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