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.
There are two types of winding-up, that is, compulsory also called creditor dissolution and voluntary also called shareholder dissolution. There are also situations in which voluntary liquidations are regulated by creditors of the company. Dissolution of a company is often petitioned by certain parties. These parties vary from one jurisdiction to another. However, generally, there are five kinds of parties who can lodge for the dissolution of a company with the courts.
The five main parties allowed to petition the courts for dissolution of a corporation creditors, secretary of state, official receiver, include the company itself, and contributories. Similarly, each jurisdiction has different grounds for dissolution allowed within it. In general, each company can decide to liquidate its assets without any external influence. That is the first ground for dissolution.
The second reason is if the company has not been issued with a trading certificate following a period of twelve months of being registration after being incorporated as a corporation. Thirdly a company may be dissolved if it fails to commence the operations for which it was incorporated after a period of one year. The fourth reason for dissolution is if the number of members falls below the minimum required by statute.
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 instance a petition is made to liquidate a company, the dissolution process is considered to have started. Upon making the petition, litigations about the company are restrained and dispositions on its property are voided. Upon receiving the petition from a party, the court bases on the grounds filed to prompt the dissolution and makes a decision as to whether the process should proceed or not. Court-appointed liquidators or official receivers may aid 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.
Claims to the assets owned by a company undergoing dissolution are ordered according to a certain priority. The priority is prescribed by the law. The specific order must be followed strictly to ensure that all parties deserving of compensation receive their share.
There are two types of winding-up, that is, compulsory also called creditor dissolution and voluntary also called shareholder dissolution. There are also situations in which voluntary liquidations are regulated by creditors of the company. Dissolution of a company is often petitioned by certain parties. These parties vary from one jurisdiction to another. However, generally, there are five kinds of parties who can lodge for the dissolution of a company with the courts.
The five main parties allowed to petition the courts for dissolution of a corporation creditors, secretary of state, official receiver, include the company itself, and contributories. Similarly, each jurisdiction has different grounds for dissolution allowed within it. In general, each company can decide to liquidate its assets without any external influence. That is the first ground for dissolution.
The second reason is if the company has not been issued with a trading certificate following a period of twelve months of being registration after being incorporated as a corporation. Thirdly a company may be dissolved if it fails to commence the operations for which it was incorporated after a period of one year. The fourth reason for dissolution is if the number of members falls below the minimum required by statute.
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 instance a petition is made to liquidate a company, the dissolution process is considered to have started. Upon making the petition, litigations about the company are restrained and dispositions on its property are voided. Upon receiving the petition from a party, the court bases on the grounds filed to prompt the dissolution and makes a decision as to whether the process should proceed or not. Court-appointed liquidators or official receivers may aid 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.
Claims to the assets owned by a company undergoing dissolution are ordered according to a certain priority. The priority is prescribed by the law. The specific order must be followed strictly to ensure that all parties deserving of compensation receive their share.
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