Liquidation 2018-01-13T23:42:54+00:00

LIQUIDATION

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LIQUIDATION

BUSINESS LIQUIDATION TO GET RID OF DEBT WHILE YOU TRADE

Many business owners have cash flow problems but cannot stop because they need the income.

We can help you to continue with trade while you get rid of the problem.

BUSINESS LIQUIDATION

When a business cannot pay its debt or if the liabilities exceed the assets, the director/member must liquidate the entity by law.

Liquidation is not necessarily a negative experience.

On the contrary, liquidation is a great tool to use to restructure the business so that it does better business than before – but without the problems.

LIQUIDATION WRITES OF DEBT

Liquidation blocks personal liability of directors and members.

Clause 129(7) of the new Companies Act (Act 71 of 2008)(as amended by the Companies Amendment Act 3 of 2011) says that you must either liquidate

the Company as soon as possible, or put it under business rescue or send a notice to the business’ creditors,

the staff and trade unions as to why the Company is not being liquidated. 

This means that you must liquidate the business because if you don’t, the director/member can Be held personally liable for the debt of the Company or Close Corporation.

Therefore, there is an obligation on the directors/members to liquidate the business sooner rather than later.

WHY DO SOME SAY THAT YOU CAN BE HELD PERSONALLY LIABLE BY SARS AND THIS

WEBSITE SAYS DIFFERENTLY?

TAX ADMINISTRATION ACT

Yes, SARS can hold you personally liable for certain taxes under the Tax Administration Act,

but they must do so BEFORE you liquidated the business.

A liquidation dissolves the business so no debt remains to be collected.

That is the one side of it.

The other side of it is that in all the hundreds of liquidations we have done, NOT ONE person was ever held personally liable by SARS after the liquidation.

The only SARS debt that a liquidation does not write off, is taxes due in terms of the Customs and Excise Act as those taxes cling to the manager of the business and not to the business.

The Tax Administration Act (Act 28 of 2011) (“the TAA”) states that the directors/members as well as their internal bookkeepers and external auditors can personally be held liable for the taxes of the business.

It is therefore so important that you take action to liquidate the entity if your taxes are in arrears and you can’t catch up, to avoid this personal liability.

LIQUIDATION WRITES DEBT OFF

All the debt of the company or close corporation is written off in a liquidation, even SARS debt.

The only debt that you remain liable for personally is any debt that you signed surety for in your personal capacity.

You need to deal with this debt. We will explain to you how when you consult with us.

TAKE THE RIGHT ACTION NOW!

HERE ARE YOUR OPTION

    • You can go under business rescue. This means that payment of debt is put on hold, but a very expensive stranger takes over your business to try and deal with creditors, plus you still have to pay the debt with money you don’t have. This doesn’t work 9 times out of 10.
    • You can try a tax compromise with SARS where you try to make arrangements with SARS to pay the debt off.  Usually it involves paying a lot of money to a person to negotiate on your behalf.  Even if you get the compromise, you still have to pay the debt. It doesn’t work 9 times of out 10, because SARS is either unrealistic in their demands or the business simply does not have the money to pay the debt. (that is why they try to compromise in the first place).  It doesn’t make sense to pay the debt if you can get rid of it.
    • You can enter into a scheme of compromise in term of Section 311 of the Companies Act with your creditors. This means that you can make an arrangement to compromise with your creditors, but

      it doesn’t solve your problem 9 times out of 10

      because you still have to pay the debt plus your creditors have to agree to your scheme.

    • You can liquidate the business, get rid of debt and continue with your business without the debt – it works 10 times out of 10, because it immediately arrests the situation, gets rid of any debt that you did not sign surety for, gives you the opportunity to restructure and you can do better business with better cash flow almost immediately.

Liquidation by far is the fastest, quickest means to get rid of debt while you continue with your business. 

Other means can bring your business to a standstill.

How to apply for liquidation

Depending on your particular circumstances, we will guide you through the process.

We prepare and lodge the application and we also assist you with staying on your feet and continuing with business if you wish to do so. 

It is possible to buy assets back and it is possible to finish jobs where you have already received deposits.

HOW DO YOU KNOW YOUR APPLICATION WILL BE SUCCESSFUL?

We have had one hundred percent success with all the liquidation applications that we have lodged.

A liquidation application is technically difficult, but in practice it is a simple process.

100% success.

You don’t have to go to court.

The Companies Act puts the burden on you to liquidate an entity if it cannot pay its debt.

The Court is aware of this and assists in granting the order. We make sure that the documents are in order.

Have any questions?

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