Scope of dissolution
Dissolution terminates both internal (partners/shareholders) and external relationships (suppliers, clients, creditors). It requires coordinated expertise in corporate law, accounting, and tax compliance.
What is company dissolution?
Dissolution is the legal act through which a company ceases to exist, except for liquidation and asset distribution purposes.
Causes of dissolution:
- Expiryof term specified in articles of association;
- Shareholder resolution(typically 3/4 majority vote);
- Completionof contractual corporate purpose;
- Illegalityof company object;
- Insolvency declaration;
- Other causes stipulated in the articles.
Dissolution by shareholder decision:
Shareholders draft minutes of dissolution, appoint liquidators (usually partners themselves), and register with the Commercial Registry.
What is company liquidation?
The phase following dissolution, involving:
- Asset realization(converting to cash);
- Debt collectionfrom third parties;
- Creditor paymentin legal order of preference;
- Net distributionto entitled shareholders.
Key liquidation documents
- Liquidation balance sheet(accounting record);
- Final accountsfor shareholder approval.
Timeline
Liquidation must conclude within 2 years of dissolution, extendable by 1 year via shareholder resolution.
Company extinction
Once final accounts are approved and registered, the company is officially extinguished.