LIMITED LIABILITY COMPANY DISSOLUTION AND LIQUIDATION

According to Section 270 of the Commercial Companies Code, there are several reasons for the dissolution of a limited liability company:

  • reasons provided in the articles of association;
  • a resolution adopted at a general meeting by the shareholders to dissolve the company or to transfer its head office abroad, certified in minutes prepared by a notary public;
  • bankruptcy declaration;
  • other cases provided by law.

LIQUIDATION

Grounds for company dissolution 

A resolution passed at a general meeting by the shareholders (notarial deed form required).

Effective Date

The liquidation becomes effective on the date of the resolution to dissolve the company. 

Representation

A company in liquidation is represented by a liquidator appointed by a resolution of the shareholders’ meeting (notarial deed form required ).

Impact

The words “in liquidation” are added to the company name.

It is not possible to make a distribution, even a partial distribution, of profits among the shareholders, or a distribution of assets, before the settlement of all the liabilities of the company is closed.

The commencement of liquidation proceedings terminates the proxy.

In case of ineffectiveness of execution against the company, the liquidator is liable with all his personal assets (without limitation) for all the obligations incurred by the company (personal liability of the liquidator).

 Procedure 

The liquidator submits documents to the registry court and the  Court and Economic Monitor.

He prepares the opening balance sheet of the liquidation, which is submitted to the shareholders for approval.

At the end of each fiscal year, the liquidator prepares an activity report and a financial statement.

First, the liquidator calls creditors to report their claims and establishes procedures for employee layoffs.

In the liquidation process, the liquidator takes steps to wind up the day-to-day operations, recover debts, meet liabilities and liquidate the company assets.

New commitments may be made only if they are necessary to complete pending matters.

Property may be sold at auction, subject to approval by the shareholders at a price not less than that set by the shareholders’ meeting.

Distribution of the remaining assets to the shareholders may be made after all creditors have been paid and all liabilities have been recovered.

Duration and dissolution of the company

The minimum liquidation period is between 9 and 12 months from the date of the resolution to dissolve the company. The duration will mainly depend on the complexity of the case and the cooperation between the shareholders and the liquidator.

Company dissolution takes place after liquidation, when the company is deleted from the register.

 

For more information about the liquidation procedure, please contact the law firm SCHITTULLI LAWYERS.

We provide legal and operational support, including acting as liquidator, to ensure that the entire procedure is carried out efficiently and in the shortest time possible for the shareholders.