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 or amendments or cancellations of those statements. (Note that such a partnership is not “assuming” a business name by making these filings; instead, the reason for making the certificate of assumed name filing is that the Secretary of State requires it to be filed before any such statements may be filed.) For example, if John Smith, a sole proprietor, does business under “Smith’s Realty,” he must file a certificate of assumed name. Filing is not required, however, if John Smith, a sole proprietor, does business as “John Smith Realty.” Likewise, if Able Building Company, a corporation, does business as “ABC Construction,” it must register the assumed name “ABC Construction.” If, however, Able Building Company does business under the name Able Building Company, it is not required to file a certificate of assumed name.
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