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HomeCorporations CodeCh. 20§ 2006 Corporate Asset Distribution Rules

§ 2006 Corporate Asset Distribution Rules

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 2006 Corporate Asset Distribution Rules

This law tells a company how it can give out its remaining money, property, or stocks to its owners when it’s being closed down, making sure it’s fair and follows the company’s rules.

Key Takeaways

  • •Payments can be cash, property, or stock.
  • •The company can pay in one lump sum or in several installments.
  • •Everything must be fair, proportionate, and follow the company’s charter and shareholders' rights.
  • •Payments should be made as soon as possible while the company’s assets are being liquidated.

Example

A small business decides to shut down and needs to pay back its shareholders.

The business can hand out cash, pieces of property, or shares to each owner either all at once or in several payments, as long as everyone gets a fair share, the company’s own rules are followed, and the payouts happen quickly while the business’s assets are being sold off.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 2006 Corporate Asset Distribution Rules

Distribution may be made either in money or in property or securities and either in installments from time to time or as a whole, if this can be done fairly and ratably and in conformity with the provisions of the articles and the rights of the shareholders, and shall be made as soon as reasonably consistent with the beneficial liquidation of the corporate assets. (Added by Stats. 1975, Ch. 682.)

Last verified: January 10, 2026

Key Terms

Distributionfairly and ratablybeneficial liquidationcorporate assets

Related Statutes

  • § 12657 Distribution To Members
  • § 6717 Corporate Asset Distribution Rules
  • § 8718 Corporate Asset Distribution Rules
  • § 12690 Corporate Law Definitions
  • § 12691 Corporate Law Application Dates

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 2006.
View Official Source