Business liquidation refers to the process by which a company is terminated and its assets redistributed. The termination may be of the entire company or just part of it. Other terms used to refer to the same process are dissolution and winding-up. However, technically speaking, dissolution is the last step of liquidation. When in need of experts in business liquidation Arlington TX is the right location to consider making a visit to.
Two kinds of winding-up are in existence, that is voluntary and compulsory dissolution. The voluntary variety is also called shareholder dissolution while the other one is also called creditor dissolution. Creditors can also control voluntary dissolution in certain situations. Petition for dissolution can only be done by certain parties that vary with the jurisdiction. The parties fall into five main categories.
The five parties that may petition for dissolution are the company itself, contributories, creditors, secretary of state, and official receiver. Grounds for dissolution also differ among jurisdictions. In general, a company reserves the right to terminate its operations and wind-up. Therefore, that is the first ground for liquidation.
Secondly, a company may be dissolved if it is incorporated as a corporation but has not received a trading certificate within 12 months after registration. Thirdly, a company is put up for dissolution if it does not begin operations for which it is registered within 12 months. Fourthly, statute requires members of a company to amount to a certain number and if the number falls below that requirement, dissolution is permitted.
Lack of means to repay debts a company owes forms ground for dissolution. Lastly, a party may file for dissolution if such a move is considered fair and equitable. Insolvency and the last reason are the two major causes of dissolution of companies in the United States. The other reasons account for a very small portion in all the dissolutions that occur in the country. A petition that bases of fairness and equitable causes strict legal rights accorded to each shareholder to be evoked.
The process of liquidation begins the instance the original petition is placed. Once the process has started, all litigations concerning the firm are restrained and dispositions of the property owned by the first are also voided. The court receives the petition and makes a decision as to whether to make an order to allow the winding-up to proceed or to deny the petition. The court may appoint liquidators or official receivers to help in the process.
Voluntary dissolution happens when the company makes the decision to voluntarily terminate its operations and wind-up. Upon such a resolution, all ongoing operations are halted immediately. A creditor voluntary liquidation is a process that allows insolvent companies to voluntarily stop their operations and wind-up. The board makes the decision to liquidate the business.
There is a certain order of priority that is followed in distributing assets of a company that is undergoing dissolution. Strict laws are enforced in following that order of priority. The laws ensure that fair and equitable settlement of claims by shareholders, creditors, and other claimants is achieved.
Two kinds of winding-up are in existence, that is voluntary and compulsory dissolution. The voluntary variety is also called shareholder dissolution while the other one is also called creditor dissolution. Creditors can also control voluntary dissolution in certain situations. Petition for dissolution can only be done by certain parties that vary with the jurisdiction. The parties fall into five main categories.
The five parties that may petition for dissolution are the company itself, contributories, creditors, secretary of state, and official receiver. Grounds for dissolution also differ among jurisdictions. In general, a company reserves the right to terminate its operations and wind-up. Therefore, that is the first ground for liquidation.
Secondly, a company may be dissolved if it is incorporated as a corporation but has not received a trading certificate within 12 months after registration. Thirdly, a company is put up for dissolution if it does not begin operations for which it is registered within 12 months. Fourthly, statute requires members of a company to amount to a certain number and if the number falls below that requirement, dissolution is permitted.
Lack of means to repay debts a company owes forms ground for dissolution. Lastly, a party may file for dissolution if such a move is considered fair and equitable. Insolvency and the last reason are the two major causes of dissolution of companies in the United States. The other reasons account for a very small portion in all the dissolutions that occur in the country. A petition that bases of fairness and equitable causes strict legal rights accorded to each shareholder to be evoked.
The process of liquidation begins the instance the original petition is placed. Once the process has started, all litigations concerning the firm are restrained and dispositions of the property owned by the first are also voided. The court receives the petition and makes a decision as to whether to make an order to allow the winding-up to proceed or to deny the petition. The court may appoint liquidators or official receivers to help in the process.
Voluntary dissolution happens when the company makes the decision to voluntarily terminate its operations and wind-up. Upon such a resolution, all ongoing operations are halted immediately. A creditor voluntary liquidation is a process that allows insolvent companies to voluntarily stop their operations and wind-up. The board makes the decision to liquidate the business.
There is a certain order of priority that is followed in distributing assets of a company that is undergoing dissolution. Strict laws are enforced in following that order of priority. The laws ensure that fair and equitable settlement of claims by shareholders, creditors, and other claimants is achieved.
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