Partnership. The sale or exchange of a partner’s interest in a partnership ordinarily results in capital gain or loss on the difference between the amount realized and the adjusted basis of the partner’s interest in the partnership. The partner’s share of partnership debt is taken into account as well. If a partner sells or exchanges the partner’s entire interest in a partnership, the partner generally is treated as if the partner received a cash distribution in an amount equal to the partnership debt allocable to the interest . Special rules apply to exchanges of an interest in one partnership for an interest in another, liquidation of a partner’s interest, and the treatment of unrealized receivables and inventory items. Tangible assets sold as part of the transaction also may be subject to state sales tax. Because of the complexity of the tax laws affecting the disposition of a partnership interest, the tax consequences of such a disposition should be thoroughly explored in advance with a competent tax advisor. Note also that under the Revised Uniform Partnership Act (RUPA), mergers of partnerships are allowed. Again, because of the complexity of tax laws, a competent tax advisor should be consulted when considering a merger of partnerships. Corporation. Disposition of an ownership interest (shares of stock) in a corporation must be distinguished from liquidation of the corporation. Individual shareholders who sell their stock generally will recognize capital gain or capital loss on the sale of their shares. The gain or loss will be long term or short term, depending on the length of time the shares were held. An interest in a corporation also may be disposed of by complete or partial liquidation of the corporation. In liquidation, the corporation may either dispose of its property for cash and distribute the cash to its shareholders, or it may distribute its property to the shareholders in exchange for the corporation’s capital stock held by those shareholders. In either case, the distribution generally will result in capital gain or capital loss to the shareholders. Tangible assets sold as part of the transaction also may be subject to state sales tax. In some cases, the timing of the transaction may affect the tax consequences. The tax consequences of corporate liquidations and stock redemptions for both C corporations and S corporations and their shareholders can be complex. For this reason, it is advisable to consult with a competent tax advisor prior to attempting to liquidate the corporation or dispose of corporate assets.
NAMING THE BUSINESS ENTITY
CERTIFICATE OF ASSUMED NAME
When Filing is Required An individual or partnership that conducts or transacts business in Minnesota under a name that is different from the full, true name of each business owner must register the name of the business by filing a certificate of assumed name with the Minnesota Secretary of State Office. A corporation, limited partnership, limited liability partnership or Limited Liability Company that conducts business under a name that is different from the exact, legal name likewise must file a certificate of assumed name for the business name. An assumed name filing is also required when a general or limited partnership that is not also a limited liability partnership (or its partners) wishes to file statements of partnership authority, statement of denial, statements of merger, statements of dissociation, statements of dissolution
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