HOW TO LIQUIDATE A COMPANY:
A company with debts cannot be liquidated (simultaneous dissolution and liquidation). If the debt is due to a pending lawsuit, the company cannot be extinguished until the debts are paid.
In the event that the company is liquidated (extinction) with outstanding debts or there are situations that may involve debts in the future (judicial proceeding), the company and the liquidator are liable for the debt. That is to say, if there is a causal link between the liquidation and the non-payment, if the closing of the company prevents the payment, there is liability, and the creditor can claim from the company and the liquidator.
HOW TO MAKE AN INSOLVENCY PROCEEDING OF A COMPANY:
The only correct way to close, terminate, liquidate a company with outstanding debts remaining is through an insolvency proceeding. The insolvency proceeding serves to liquidate, to realize, to convert into money all the assets of the company to pay with it, as far as it reaches, to the creditors of that company.
PHASES IN A LIQUIDATION:
It is possible to initiate the dissolution process (for the cause of losses, as established by the legislation in force), appoint the liquidator and, for example, wait for the completion of the ongoing judicial proceedings to be able to liquidate (extinguish) the company definitively. Therefore, the extinction of the company would be done in two phases:
Dissolution Phase (minutes of the Shareholders' Meeting, appointment of the liquidator, deed before the Notary and the Commercial Registry).
Liquidation Phase (minutes of the Shareholders' Meeting, final liquidation balance sheet, deed before a Notary Public and Commercial Registry).
REQUIREMENTS TO PROCEED WITH THE LIQUIDATION OF A COMPANY:
Between Phases 1) and 2) the liquidator's obligations are basically the following:
- Formulate an inventory and a balance sheet of the company.
- To conclude the pending operations and to carry out the new ones that are necessary for the liquidation of the company.
- To perceive the social credits and to pay the social debts.
- To keep the accounting of the company, as well as to keep and to guard the books, the documentation and correspondence of this one.
- To dispose of the corporate assets.
- To periodically inform the partners and the creditors of the state of the liquidation.
If the liquidation is prolonged for a period longer than that foreseen for the approval of the annual accounts, the liquidators will present to the general meeting, within the first six months of each fiscal year, the annual accounts of the company and a detailed report that allows to appreciate with exactitude the state of the liquidation.
RESPONSIBILITIES OF THE LIQUIDATOR OF A COMPANY:
- The responsibilities of the liquidator are similar to those of the administrator.
- They must draw up the company's balance sheets
- They must conclude the pending operations
- They must keep the accounts
- They must convene meetings to comply with the obligations of the Commercial Registry.
- They must carry out the liquidation operations
- They must collect credits and dividend liabilities.
- They must settle and arbitrate when necessary.
- They must pay creditors and partners.