General Studies · Liquidation

During the formal dissolution and liquidation of a company, how are the cash proceeds remaining after the sale of all assets distributed?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Transferred completely to the government treasury as corporate tax
2Distributed to shareholders after full payment of all liabilities and indebtedness✓
3Paid to preferred creditors before settling any debt or obligations
4Distributed entirely to management as performance bonuses

Correct answer

Distributed to shareholders after full payment of all liabilities and indebtedness

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