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Accounting question re dissolved corporation filing Chapter 7
I KNOW NOTHING ABOUT TAX. Your guidance is appreciated.
Under California law, a dissolved corporation or limited liability company
continues to exist for the purpose of:
a)]
Such a corporation or limited liability company does not continue to exist
for the purpose of continuing business except to the extent necessary to
wind up its business. [Calif. Corps.C. 2010, 17354(a)]. The effect is
that a dissolved California corporation or limited liability company can
file a bankruptcy petition to liquidate but not to reorganize.
Debtor liquidated company to the extent possible and paid off as many
creditors as possible. There is one large creditor remaining, and
receivable assets remaining that so far have been uncollectible. A
certificate of dissolution was filed in April 2010, checking the box that
says, " The corporation's known debts and liabilities have been paid as far
as its assets permitted." Debtor wants to file Chapter 7 and allow a
trustee to try to collect those remaining receivables and pay the large
creditor to the extent possible.
Accountant is preparing the "final" tax return for the business which is
2010. He tells me that after the return is prepared and filed the balance
sheet will show "zeros" because of how they offset the assets and
liabilities. I am not sure what that means with respect to the Chapter 7.
The collectibles will still exist, as will the big creditor. Should debtor
not file the final tax return prior to filing BK? Will filing the "final"
tax return mean that there is nothing left to wind up or liquidate, meaning
that it can't file the bk? Should he wait and let the estate file the final
tax return? Or will the tax return have no effect on the Chapter 7?
Thanks for your help.
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
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