What do you need to know about liquidation?
Liquidation can be defined as the process by which assets of a company are collected and then sold to pay off its debts. The amount remaining after paying off all the expenses, debts, and costs is further distributed among company shareholders as per their interests and rights. Otherwise, this remaining money can be used to deal with other formalities as per the company constitution. Once the winding-up process is complete with the help of an approved liquidator in Singapore, the business gets formally dissolved and all its operations are ceased. There are generally three possible ways to wind up company operations with members’ voluntary liquidation, creditors voluntary liquidation, and compulsory winding up. The company liquidation process is administered by the professional liquidator in Singapore that can be appointed by creditors, directors, or court, depending upon the type of wind up.
Why should you consider approved liquidator Singapore?
There are so many reasons to consider company liquidation; a few of them are listed below:
- If the company is insolvent.
- The company has terminated all activities and operations.
- There is some deadlock in management.
- The company reported oppression of the minority shareholder.
- Financial or corporate restructuring of the group to which the company is associated.
- Maximize or minimize tax benefits for the entire group.
- Breach of various statutory provisions.
- Company working outside the pre-defined scope of activities.
- Company liquidation can protect company directors from insolvent trading.
- Relieving director’s stress and worry by legally handling company affairs.
What happens after voluntary liquidation or winding up of the company?
After liquidation or winding up, the company can cease various business operations. The transfers of shares are restricted unless sanctioned or permitted by the
. The status of members of the company cannot be altered until it is necessary for leading a beneficial winding-up procedure. Furthermore, the winding-up or liquidation process can cease the powers of all directors. Right from the date of liquidation commencement, the company needs to ensure that all documents are prepared with the term “in liquidation”. Other than this, all company records and books must be handed over to the approved liquidator Singapore.
How assets are distributed after liquidation?
After the company liquidation process, all the assets are distributed as per pari passu procedure. It is mainly based on the exception to preferential and secured debts. The distribution of assets occurs only when sufficient assets have been recovered. Furthermore, the order of distribution involves secured creditors, preferential creditors, unsecured creditors, preferred shareholders, and ordinary shareholders.
How long liquidation process Singapore takes?
For the straightforward liquidation process, the company may require a duration of 6 months. It must be subjected to the company’s tax status which means outstanding tax assessments. However, there is no specific timeline for the company liquidation, it is important to consider outstanding company matters, investigation of company affairs, and finalization of tax-related matters. Although the liquidation process can be stressful for all involved parties, if you hire an approved liquidator Singapore, they can handle the entire process with ease.