Process of liquidating a company

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One can only sequestrate, in terms of the Insolvency Act, if one owns a property (or other big, fully paid assets) or if one has cash.

If one does not own property and if one does not have a certain amount of cash, then one cannot sequestrate.

They scratch harder and can make life difficult for you unnecessarily. If they have a nasty liquidator (and his mandate will most probably be to aggressively test whether the entity is hiding assets), then you may be in for a nasty experience.

If it is (hopefully) your nominated liquidator, you have a better chance of smooth sailing.

So the bottom line is this: if you have the opportunity and it is necessary, let the entity bring the liquidation application itself before creditors act.

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As soon as the basic decision was made to close the entity down (this is basically the most difficult decision! The first important item is that no further debt must be paid once the decision has been made.

Sometimes entities are on the edge of solvency and insolvency.

A bigger worry is always what if a creditor applies for the liquidation of the entity.

It is always better for the entity to bring a voluntary liquidation application first, as opposed to being liquidated by a creditor.

Although it seems to be a paradox, it is true that if the entity brings the liquidation application voluntarily, the entity is in control of the process: you decide you have time to mentally prepare; you have time to position yourself so that you can carry on with business; you nominate the liquidator (the person that is going to finalise the insolvent estate). One never wants to give control to a creditor, because if a creditor brings the liquidation application, it is usually aggressive (because they are upset with the entity).

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