We discuss the legal requirements and options for company directors, shareholders, and creditors to initiate liquidation, as well as the role of the Master of the High Court and the liquidator in the process.
If you would like to liquidate your company but are unsure of the process, contact us and we will assist you with information and with the process. Let us help you get rid of stress, worry and fear by helping you get rid of debt. We can restructure your company so that you can keep on trading. We are specialist liquidation attorneys. Call us today for your FREE 15-minute call.
Section 346 of the Companies Act 61 of 1973 says that the following persons can apply for the liquidation of a company. They can all act separately in some cases or jointly in others. Let us discuss them seperately.
• The company
- The company – represented by the directors and shareholders (Section 346(1)(a) of the Companies Act, Act 61 of 1973). If the company is liquidating itself (voluntary liquidation), a Special Resolution must be signed by all the directors and shareholders. The company can be liquidated either at CIPC or by a Court.
• Creditors
Creditors that are owed money can lodge a liquidation application against the debtor company at the High Court. This is referred to as a forced liquidation. This is in terms of Section 346(1)(b) of the Companies Act 61 of 1973.
• Directors or shareholders all do not agree to liquidation
One or more of the directors/shareholders of a company (or an executor of a deceased director or shareholder), can bring a liquidation application against the very company that one is a director or shareholder of. This will be a High Court liquidation application. This is where not all of the directors or shareholders agree that the company will be liquidated.
• Directors and shareholders all agree to liquidation
If all the directors and the shareholders agree that the company will be liquidated, they can liquidate the company in one of the following manners:
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- Voluntary liquidation (where all of the directors and shareholders sign all the required documentation) at CIPC – this liquidation will be a members’ voluntary liquidation of the company.
- Voluntary liquidation at CIPC as a liquidation by creditors.
- Voluntary liquidation at court in terms of Section 344 of the Companies Act, Act 61 of 1973. This is a court application and the legal ground in the application will be that the company is unable to pay its debts.
- NOTE that a company can be voluntarily liquidated at CIPC or at the High Court.
As liquidation attorneys, we have assisted countless companies to liquidate with 100% success. Let us help you solve your company problem today so that you can get rid of the stress and worry and fear.