What is Liquidation?
In essence liquidation takes place where the unfortunate event occurs where a company would come to the point where it cannot pay its debts or alternatively to the latter, the company’s liabilities would exceed its assets.
What is the purpose of the process?
The purpose of liquidation, is in order to freeze the assets and business proceedings of a company, to be handed over for administration under a Liquidator, whom may be appointed by the Master or be nominated, in order to sell any and or all assets and to allow the liquidator to pay the proceeds to the creditors.
How long does such an application take?
Depending on the court roll and whether or if such an application become opposed, if not done by resolution, one could obtain a provisional order in six to eight weeks.
What obligations do I have as director of member of a Liquidated Company of Closed Corporation?
Before and during liquidation you have an obligation to protect the assets of your company / close corporation. After the liquidation orders are granted you as a Director or Member do have an obligation to assist the liquidator by giving him all information, disclosure, books and paperwork and to furthermore disclose which assets belong to the company and where they are located.
The Sleeping Bear Called SARS
It is very important to approach any debt by a company due to SARS, with great caution. If the process is not done correctly, the Tax Administration Act clearly stipulates that a Director or Member can be held liable for the Company or Closed Corporation’s debt due to SARS
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