No company or business lasts forever. This may happen in many different ways, including bankruptcy, a takeover, (turbo) liquidation, dissolution, etc. Every type of business has its own rules regarding termination. GMW lawyers can help you with any form of business termination.
Liquidation and settlement
If a business is no longer profitable, or if you are envisaging a reorganization, you can decide to liquidate your company. This requires a decision by the shareholders. A liquidator is then appointed who will settle the current matters, liquidate all the company’s possessions with the aim of paying the proceeds to the creditors and – if any money is left over – to the shareholders. If there is insufficient money available to pay all the debts, the liquidator will have to apply for the bankruptcy of the company.
Termination of a business
If a company does not have any possessions, the liquidation can be omitted. This is known as “turbo-liquidation”. The company ceases to exist when the shareholders decide to dissolve it. There is no liquidator, no bankruptcy and no official receiver. This sort of turbo-liquidation is also possible if there are still outstanding unpaid debts. At this stage, creditors who think that their rights are not being met because they believe the company did still have possessions or money from which they could have been (partly) paid can ask the court to liquidate the company or declare it bankrupt.
The liquidation of companies is generally a more difficult and time-consuming process than you might think. The lawyers of the Enterprise & Insolvency department are regularly appointed as liquidators or receivers in bankruptcies and can provide expert assistance on the basis of this experience. We also regularly advise companies on issues related to (turbo) liquidation and support creditors who are confronted with the liquidation of a debtor. We can draw up the decisions of the shareholders for you, discuss matters with your stakeholders and assist you with advice regarding every aspect of the termination of the company.
If you would like to know whether it is sensible to terminate your company, what would be the best way for you to do this, or would like to submit a case directly, we invite you to contact our Enterprise & Insolvency department.
You can also contact us about the following related subjects:
- Manager’s liability
- Pre-pack bankruptcy
- Legal forms
- Disputes amongst shareholders
- Mergers and takeovers
- Joint ventures