Liquidation is a legal remedy for companies that are terminal and that do not qualify for business rescue. Let’s have a look ate the question, what is liquidation and answer some questions.
According to the Act you are obligated to make alternative arrangements with creditors when the following occurs:
You foresee that withing the next 6 months you might become due to creditors with minimal positive outcome. This is known as salvageable. We us business rescue for companies that is salvageable. Please click here to read about business rescue
You are beyond the point of recovering and indeed past due to creditors. This is know as terminal. We will use liquidation to ensure that the outcome is fair for all parties concerned.
There are 2 types. Voluntary and compulsory
Voluntary applications is when the company owner approach the High Court with an ExParte application to liquidate his/her legal entity
Compulsory applications is when a business owner fails to liquidate and a creditor representative approaches the Court.