Identify Which of the Following Statements Is False

question 37

Multiple Choice

Identify which of the following statements is false.

• A)A corporation must file an information return with the Internal Revenue Service within thirty days of adopting a resolution to liquidate.
• B)The adoption of a formal plan of liquidation can provide additional benefits under tax laws to the corporation and its shareholders.
• C)A plan of liquidation must be produced in writing in order to be accepted by the Internal Revenue Service.
• D)The adoption of a plan of liquidation permits a parent corporation a three-year time period to carry out the complete liquidation of its subsidiary.

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Definitions:

Rights Offer

A financial offering in which shareholders are given the right to purchase additional shares directly from the company at a discount before the new shares are offered to the public.

Existing Shareholders

Individuals or entities that currently own shares in a company and have an interest in its performance.

Firm Commitment

A commitment by an underwriter to buy all the unsold shares in an issue and sell them to the public, taking on the full risk of the sale.

Firm Commitment Underwriting

An agreement in which an underwriter commits to buying all the securities offered by the issuer and selling them to investors, taking on the full risk of selling the securities.