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Simple English definitions for legal terms
corporate distribution
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A quick definition of corporate distribution:
Corporate distribution refers to a company giving money or property to its shareholders, like paying dividends. It can also refer to a partnership giving money or property to its partners. When a company is closing down, it may distribute its assets to its owners in a process called liquidation. Probate distribution is when a court divides a deceased person's assets among their heirs. Secondary distribution is when a large block of previously issued stock is sold to the public. Securities-offering distribution is when a company sells new securities to the public through an underwriting agreement with a broker-dealer or informally without brokers. Trust distribution is when a beneficiary of a trust receives money or property.
A more thorough explanation:
Corporate distribution refers to the transfer of money or property by a corporation to its shareholders. This can include dividend payments from the corporation's earnings or the distribution of excess capital that is not needed for current operations.
- Liquidating distribution: When a corporation or partnership is dissolving, it may distribute its assets to its partners or shareholders. This is known as a liquidating distribution.
- Nonliquidating distribution: A corporation or partnership may also distribute excess capital that is not needed for current operations. This is known as a nonliquidating distribution.
- Partnership distribution: A partnership may distribute cash or property to its partners as payment for their share of earnings or as an advance against future earnings.
These examples illustrate how corporate distribution can take different forms depending on the situation. In each case, the corporation or partnership is distributing money or property to its shareholders or partners.