It is sometimes a difficult decision to liquidate a company, it should however not be a complicated process once you've made the decision. Liquidations should be seen as a business decision to limit further financial losses and/or to bring a business to a natural end.
A company or close corporation usually applies for voluntary liquidation for the following reasons:
The company is unable to pay its debts and is forced to liquidate.
The liabilities of the company exceed the company's assets.
The directors of the company do not want to continue with the company or cannot agree on how the company should be managed or how business should be conducted.
Voluntary liquidations can be dealt with in an informal process without the need of approaching the Courts. The Companies and Intellectual Property Commission allows for voluntary liquidations to be processed through them directly. This process should however still be done with the assistance of an attorney as the directors do stand a chance to be held personally responsible for some debt.
The moment that the company is placed under liquidation, a liquidator will be appointed to manage the process from there and realise all the assets of the entity. The main purpose of the process is that the remaining assets will be liquidated and redistributed between the outstanding creditors.
The voluntary liquidation process subsists of two avenues, namely solvent and insolvent companies and the process for affecting each vary considerably.
You do not have to struggle through this process alone, contact our experienced attorneys to guide you through the process.
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