How to Transfer Debts & Assets From One Corporation to Another

by Jonra Springs; Updated September 26, 2017
Equipment and withholdings are commonly transferred among corporations.

Corporate transfers send debts and assets to other corporations for gains or tax advantages. The transferring corporation may elect to burden its parent corporation with debt in order to raise its net worth. An owner of multiple corporations may elect to transfer assets from one that is liquidating, or going bankrupt, to another that is maintaining business. Parent companies are often given both the debt and assets of their smaller entities that are closing. The types of assets and debts determine how they are transferred.

Step 1

Appraise the fair value of financial assets that are not performing well for a corporation, such as loans or mortgages, properties owned and stocks that are losing value. Transfer these corporate assets to the parent company by selling them for fair value. Replace the losses on the part of the small corporation with cash from the sale to raise the value of the smaller entity.

Step 2

Transfer assets such as vehicles, properties, stocks and equipment from a liquidating corporation to a parent corporation or another operating company owned by the same individual by signing over the titles, deeds notice letters. Pay all taxes and liabilities of the liquidating corporation before getting the value of the remaining assets appraised for corporate transfer.

Step 3

Open a second corporation and transfer assets, such as equipment and goods, from a corporation that will be filing for bankruptcy. Transfer stocks from the corporation to yourself as the owner and use the wild card exemption to claim it as personal property. Continue to do business with the equipment and supplies during the bankruptcy proceedings. Use the newly formed corporation to remain in business or sell it.

Tips

  • Use a third party to appraise assets with questionable fair value such as real properties.

    Petition government organizations presiding over business structures for approval of transfers concerning any regulated assets such as stocks.

    Send notice of corporate transfer of debts to all debtors and lien holders identifying the new corporation responsible for the liabilities.

    Report all transferred items and payments made on the part of both corporations to the IRS.

About the Author

Jonra Springs began writing in 1989. He writes fiction for children and adults and draws on experiences in education, insurance, construction, aviation mechanics and entertainment to create content for various websites. Springs studied liberal arts and computer science at the College of Charleston and Trident Technical College.

Photo Credits

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