When a company is insolvent or unable to pay its obligations, liquidation occurs. Liquidation can come about due to legal court processes, at the request of creditors or the company may voluntarily decide to be liquidated. The company is then closed, and its property is reallocated to pay creditors and shareholders. This redistribution of assets depends on the priority of their claims. The bankrupt company is no longer in existence by the end of the liquidation process.
Liquidation is usually viewed in a negative light, however, at Clear Future, we aim to make it as quick and painless as possible. We see liquidation as a second opportunity and an enabler for a new business plan.
The liquidation process can be conducted in two ways. An application can be issued through the High Court (Magistrate’s Court for close corporations) or by way of a director resolution. This varies according to the type of business. Subsequently, the steps to be followed will be determined by the Risk Profile associated with that business.
The documents required include the Registration documents of the business, the Directors’ or Members’ identification documents, a list of assets and liabilities and lastly, a SARS registration document.
Clear Future provides guidance throughout the liquidation process. We offer consultations with you to obtain a better understanding of your needs and to derive a plan of action. We ensure that all methods make economic sense and end up at a desired outcome. With liquidation, the process is fast and can take up to two weeks to resolve.
