If a business owner desire to do business close in accordance with relevant legislation i.e. the Companies Ordinance, 1984 (as amended) and the Companies (Court) Rules, 1997, in which mentioned detail of the procedure for winding up the business. If your company is considering seriously to dissolve a company you should seek appropriate professional legal advice.
Before we explain how to liquidate a company, let’s first understand what this term means – the process by which a company is liquidated (i.e., the life of a company comes to an end). ). Thus, liquidation is the process of terminating the existence of a company. Meanwhile, in this process, the company’s assets are liquidated, the company’s debts are paid off from the assets received or from partners, and if any surplus remains, it is distributed among the participants in proportion to their shareholdings.
The liquidation of a company is also known as the “liquidation” of a company. The liquidation process begins when the court orders liquidation or decides on voluntary liquidation. The company is liquidated after the completion of the liquidation process. Upon liquidation, the company ceases to exist. Hence, the legal procedure by which a registered company ceases to exist is called liquidation.
The person who wishes to do the business close is called a liquidator. If the settlement of closing business is enforced by a court of law, the term used for that person is the plaintiff. The liquidator’s functions include accepting and returning the company’s assets, paying its debts, and distributing any surplus to the partners. Plaintiffs operate under judicial supervision through a recognized reporting system.
The Law of Pakistan gives the following general rights or powers to the liquidator(s):-
The Company can Liquidate by:
Thus, liquidation is the process of ending the life of a Company. And also during the Company Closing Procedure, the assets of the Company are alienated, the debts of the Company paid off by the realized assets or contributors, and if any surplus remains, it become distributed among the participants in proportion to their stake in the Company.
Furthermore, the liquidation of a Company is also called the “liquidation” of the Company. In addition, the liquidation process begins after the court issues a liquidation order or a voluntary liquidation order. As well as the Company liquidated after the completion of the liquidation procedure. Upon dissolution, the Company ceases to exist. Thus, the legal procedure by which a registered Company terminated and known as liquidation.
Some important consequences of the Company Closing Procedure or liquidation of the Company are as follows:
As for the Company itself, this does not mean that the Company has ceased to exist. The Company exists as a legal entity with all the rights of such an organization, with the only change that its management and administration must be carried out through the liquidator or liquidators prior to the final dissolution of the Company. As for the shareholders. A new statutory liability as contributors appears. Any transfer of shares or change in the status of a shareholder after liquidation has commenced by court order, unless approved by the liquidator, is void.
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