If a shareholder receives more than a proportionate share of the assets of a liquidating corporation,...

If a shareholder receives more than a proportionate share of the assets of a liquidating corporation, the excess is treated as a payment received that is attributable to those shareholders who receive less than their proportionate share.

a) True
	b) False

Expert Solution

During liquidation process of a company shareholder receive the amount which is left out after paying the creators, any outstanding government dues. also any loan received from the partner or any secured loan from the banks are to be paid off before paying off the shareholders.

So the left out money will be distributed to the shareholder in the proportion of their holding in the company and if the if any shareholder receive more more than a proportionate holding in the company then the amount is because of of excess money left with the company after paying off all its liability and the shareholder but in this case all the shareholder will receive more amount then there proportionate holding in the company.

It is not the case that one shareholder will receive lower amount than its proportionate holding and the other shareholder will receive a higher amount it is only the excess amount left with the company that will be paid to all the shareholders equally and therefore no shareholder will receive lower amount then is proportionate holding.

Therefore the correct option is False.

ekkarill92 answered 1 month ago

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