What is company liquidation?

Liquidation is a legal procedure, in which the production and operation of the company stop, all assets (including machinery, factory buildings, offices and property) are sold in a short time and converted into cash, and then the outstanding debts are paid off (distributed) in turn, and then the company is dissolved according to legal procedures.

When the company has problems or debts. Or shareholder disputes. Or poor management, there is naturally the possibility of liquidation,

After the company's assets are liquidated and distributed to creditors and shareholders, the company will end. Limited companies and unlimited companies have different liquidation and handling methods. Generally speaking, since an unlimited company is not an unincorporated organization and operates in the form of sole proprietorship or partnership, it only needs to notify the Inland Revenue Department to stop operating, account for the company and stop renewing the business registration certificate.

The procedure is much simpler than limited company. At the same time, because creditors can directly go to the court to collect debts from the person in charge of the unlimited company, or even ask the parties to declare bankruptcy to pay off, the unlimited company will only have voluntary liquidation or stop operating, and there is no compulsory liquidation proposed by creditors.

After deciding to liquidate or suspend business, all assets of the company will be sold. If it is a partnership operator, the assets shall be distributed according to the partnership agreement concluded when the company was established. In fact, it is often because shareholders can't continue to cooperate that they decide to enter liquidation.

Or if you can't acquire the knowledge of * * * *, you can hire an accountant at this time, or you can ask the chairman of the Institute of Certified Public Accountants to designate a neutral accountant. If it still can't be solved smoothly, you can go to court. Some courts appoint intermediaries to handle liquidation, but regardless of whether the liquidator appoints himself or the court, the expenses will be deducted from the company's assets first.

If the unlimited company is sold to others, it is only necessary for shareholders and buyers to reach an agreement to allocate the proceeds from the sale of the company to the company's assets for distribution. However, it should be noted that if the tax bureau thinks that the selling price is lower than the market price, the tax bureau will make another assessment.

Extended data:

Liquidation can be simply divided into two types, including:

Voluntary liquidation: Partners, shareholders and other company members of a limited company think that the original mission of the company has been completed, or the company has no need to continue to operate, and take the initiative to liquidate, sell assets back to cash, distribute them to creditors and shareholders, and terminate its corporate status. This kind of liquidation is not necessarily "insolvent".

Compulsory liquidation: because the company's funds can't cover its liabilities, the creditors can recover through civil law, and finally the court issues a compulsory liquidation order.

I. Voluntary liquidation

Automatic liquidation can be divided into: automatic liquidation of company members and automatic liquidation of creditors.

1. Automatic liquidation of company members.

When the company members decide to carry out voluntary liquidation and dissolve the company, voluntary liquidation will be carried out. If the company members decide to liquidate the company, the company will usually stop operating and voluntary liquidation will begin. If the company is able to repay its debts, and the company members can provide legal statements to prove the company's solvency, the liquidation will be regarded as voluntary liquidation by the company members.

In the above-mentioned voluntary liquidation case, the meeting decided to appoint a liquidator for liquidation. Otherwise, the liquidation case will be regarded as creditors' voluntary liquidation and a creditors' meeting will be held. At this time, the directors of the company must report the affairs of the company. If creditors voluntarily liquidate, a company liquidation review committee will also be established and its members will be appointed.

Even after the voluntary winding-up of the company, the court can still issue a compulsory winding-up order, but the contributories applying for winding-up may need to pay attention to the fact that voluntary winding-up may harm the interests of other contributories.

2. Creditors are automatically liquidated.

The difference between creditors' voluntary liquidation and shareholders' voluntary liquidation lies in whether assets and debts can offset each other. Insolvency belongs to the former, and insolvency belongs to the latter. However, whether it is the former or the latter, shareholders hold a special meeting to pass the liquidation resolution, and then hold a creditors' meeting, at which time all creditors must also attend.

Such as banks and suppliers, if all creditors agree to the liquidation of the company, they can reach the conditions of voluntary liquidation. After the liquidation decision, the liquidator must be appointed to be responsible for all liquidation affairs. If the company is insolvent, the liquidator will be recommended by shareholders and the creditor will make the final decision. However, if the assets exceed the liabilities, they will be directly designated by the shareholders.

Second, compulsory liquidation.

If the company has too much debt, its creditors and/or company members may apply to the court for liquidation.

After the winding-up petition is filed, the court will hear the winding-up petition, and finally the court will issue a compulsory winding-up order to wind up the company. Compulsory liquidation is the liquidation caused by the debtor's recourse to the court. When the creditor gets the value order, the company will receive a formal notice to pay off the debt within 2 1 day. If the company cannot repay, the creditor may apply to the court for compulsory liquidation.

If no one objects to the company's application for liquidation during the formal court hearing, the court will appoint the Official Receiver's Office as the liquidator, and if there are some complicated liquidation matters, an accountant can also be hired to handle them.

In addition, listed companies will be subject to more restrictions than private companies, because listed companies are subject to the supervision of both the Stock Exchange and the Securities and Futures Commission. If a company is applied for liquidation, it needs to stop its operation to prevent the stock price from fluctuating too much.

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