What's a Dissolution?
A dissolution of a company is the process of legally ending a company by stopping its operations and dissolving the company into its assets. This process can be done voluntarily or involuntarily, but usually involves a court order.
In most countries, a company is dissolved if the companies follow these steps:
● Put an advertisement of dissolution in a daily circulation, such as newspapers.
● Send a letter of dissolution to the Registrar of Companies.
● Put up a notice on the company’s website informing the public of the dissolution.
● Send a notice to each creditor of the company informing of the dissolution.
● Send a notice to each director of the company informing of the dissolution.
● Send a final notice to each shareholder
The time to inform all parties depends on the court’s order or the company’s decision, but it is usually a month to a full quarter of a year.
What's a Liquidation?
A liquidation of a company is the process of selling the assets of a company to pay creditors. This can be done because the company has become financially insolvent.
Companies that have been bankrupt for a long time are often liquidated in order to maximize returns for shareholders.
In a liquidation, the company will sell off its assets in order to repay creditors and shareholders.
The company's assets may include any number of factors, such as real estate or buildings, inventory, cash, and equipment. The company will then distribute its remaining resources to its creditors using an executor.
In most countries, you can follow these steps to liquidate your business.
● File with the local revenue agency
● Contact the company's shareholders to agree on the liquidation
● Contact the company's creditors to agree on the liquidation
● Write to the national securities exchange to request the delisting of the security
● Hold an emergency meeting with shareholders and creditors to vote on the liquidation
● File document with the country’s local revenue agency for liquidation once again
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