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BTLG Table of Contents > Sales and Use Tax Annotations > S > 535.0000 Successor's Liability > Annotation 535.0073

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535.0000 Successor's Liability—Regulation 1702

Annotation 535.0073

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535.0073 Self-Help. The two principal stockholders of a corporation made a decision to discontinue their business association. They each obtained a portion of the equipment owned by the corporation and operated similar businesses separately. This "self-help" to the obtaining of business equipment does not constitute a sale such as to cause application of successor liability. The corporate assets are still owned by the corporation and may be levied upon to satisfy the corporate tax debt. The distribution of assets to a shareholder may be recovered by the corporation or by its receiver, liquidation or trustee in bankruptcy if the distribution was made without a court order or without adequate provisions made for payment of the debts of the corporation (see California Corporation Code 5012). 2/25/77.