The process of terminating the operations of a business and redistributing the assets is called business liquidation. The whole company or a portion of it may be liquidated. Winding-up and dissolution are alternative terms for this process. However, dissolution is technically the final step in liquidation. When in need of professionals in business liquidation Arlington TX offers the best place to make the first trip 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 occurs when a company decides that it wants to terminate its operations and wind-up. All ongoing operations are halted immediately when the instance that decision is made. Insolvent companies can be allowed to voluntarily wind up through a process called creditor voluntary liquidation. The decision to liquidate is to be made by the board.
The distribution of assets in this process follows a certain priority. The priority is governed by strict laws. The laws ensure fairness and equality in the distribution process of assets. Therefore, all claims are settled in the required order to avoid disputes.
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 occurs when a company decides that it wants to terminate its operations and wind-up. All ongoing operations are halted immediately when the instance that decision is made. Insolvent companies can be allowed to voluntarily wind up through a process called creditor voluntary liquidation. The decision to liquidate is to be made by the board.
The distribution of assets in this process follows a certain priority. The priority is governed by strict laws. The laws ensure fairness and equality in the distribution process of assets. Therefore, all claims are settled in the required order to avoid disputes.
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