What is dissolution and liquidation?
dissolution and liquidation is a double process that takes place when the company is permanently closed. The aim is not only to destroy any inventory and assets owned by companies, but also to end the recognition and position of business as a legal entity. The laws concerning the processes needed to achieve this objective differ somewhat from one nation to another, so it is necessary to cooperate with the legal advisor to make sure that each step is done in order. This involves ensuring that the strategies used are in accordance with the regulations that control the functioning of businesses in the jurisdiction in which the enterprise has been incorporated.
For the most part, the first component in the dissolution and liquidation process focuses on the proper sale of all business assets. The intention is to sell assets and settle any outstanding debts owed by a company. The liquidation of assets also allows to compensate for shareholders' obligations, to pay all taxes that are currently due for the period until the last operating day, and in general withE make sure everyone connected with the company is fairly compensated. Depending on the extent of assets held by the company, this process can last anywhere from a few months to several years.
In countries that first require the sale of assets, the latest phase of dissolution and liquidation focuses on the official termination of the existence of society as a legal person. Here the task requires the necessary paperwork to government agencies that oversees the integration and official recognition of commercial enterprises in the area where the company was founded. The proof that the entity equalized all known obligations and was sold by all assets is often required before the company is considered legally and permanently dissolved.
It is important to note that the criteria for control of the dissolution and liquidation process may vary from one country to another and possibly differ from one state or province to another insome cases. For example, if the company is dismantled as part of a court order, there is a chance that the company will be officially dissolved as the first and assets transferred to the holding company. This holding company then takes over the task of liquidation of assets, with the courts to pay cash generated from the liquidation to the creditor and other stakeholders. For this reason, the security of the legal advisor and ensuring the laws of dissolution and liquidation of the compliance with the letter is very important if the former owners wish to fully settle the company's business and move to new projects.