Simple English definitions for legal terms
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A nonliquidating distribution is when a company or partnership gives out some of its assets to its shareholders or partners without going out of business. This can include giving excess money or property that is not needed for current operations. It is different from a liquidating distribution, which happens when a company or partnership is dissolving and distributing its assets to its owners.
A nonliquidating distribution is when a corporation or partnership distributes its assets to its shareholders or partners without going out of business. This can include excess capital that is not needed for current operations.
These examples illustrate how a nonliquidating distribution works. The corporation or partnership is not dissolving or going out of business, but is instead distributing some of its assets to its shareholders or partners.