Liquidation, also referred to as winding up is the process by which a company’s assets are liquidated and the company either closed or deregistered. A liquidation process can be initiated either by the shareholders (voluntary liquidation) or by the creditors upon obtaining the court’s permission (compulsory liquidation). A firm can wind up by selling off its assets to convert them into cash to pay off its unsecured creditors, while any remaining amount is then distributed among the shareholders according to their shareholdings. This can be a rather long and tedious process and is best handled by those with the necessary knowledge and experience.
Here at 3E, we have seasoned and experienced liquidators who can assist and guide you through the entire process. The role of a liquidator is basically to collect and deal with the company’s assets and if possible, make distributions to the creditors and members. The liquidator is also responsible for conducting investigations into why the company failed. The liquidator must follow time-frames as set out by relevant legislation and once a company is placed into liquidation, the liquidator will send out notices to known creditors. In certain cases, the liquidator may decide to take action against directors and third parties, including court proceedings. The process is time-consuming and would be best handled by professionals, like those in 3E to ensure a smooth and effective transaction.
Contact 3E Accounting International for further assist on Liquidation Services in the country you are incorporating.