LIQUIDATION = ZERO DEBT

Liquidation = Zero Debt is a very bold statement. But if business rescue procedures fail to turn around a distressed company, liquidation is the only option that remains.

Liquidation = Zero Debt We know this to be true. Read more on how liquidation equals zero debt and how business owners can benefit from it.

NAVIGATING LIQUIDATION IN SOUTH AFRICA
Navigating the liquidation process in South Africa is not a simple process for a company owner. There are numerous risk factors that should be avoided. Liquidation = Zero Debt, and it is usually preferable to use a skilled service provider to assist you through this journey

OBSTACLES S.A. BUSINESS OWNERS FACE DAILY
Businesses in South Africa are suffering an array of obstacles, for instance, power outages, tax troubles, labour conflicts, inflation, and the ramifications of COVID-19 lockdowns.  All of which are making it difficult for them to exist.

Due to the financial strain brought on by these problems, business owners suffer from melancholy, stress, and anxiety about losing their company. Still, there is a bright side. Business owners who want to quickly resolve their financial issues and move on may choose to liquidate their company.

STRESSED OR WORRIED ABOUT YOUR FAILING BUSINESS?
If you are stressed, worried, or nervous about a failing business, we can help you. Liquidation equals zero debt. Speak with a liquidation consultant now.

Is liquidation optional for companies in distress?
No, it is critical to understand that liquidation is not an optional process. Because the Companies Act stipulates that if a company can no longer service its obligations, it must be liquidated.

COMPANIES ACT 71 OF 2008 AS AMMENDED
The Companies Act states that directors must liquidate a business if it is unable to pay its debts or when its liabilities outweigh its assets (liquidation means the firm is insolvent).

This serves as a definition of liquidation too.  If a business is unable to pay its debts or when its liabilities outweigh its assets (liquidation means the firm is insolvent),

No, directors and members of a close corporation should understand that liquidation is not something to be avoided at all costs but rather a crucial and necessary action to take when a firm is unable to meet its obligations or when its liabilities outweigh its assets.

Is it necessary to have assets to qualify for liquidation?
It is also worth mentioning that a company is not required to possess assets in order to be liquidated, making it a helpful tool to employ when the time for liquidation comes.


Debt: written off.
Any outstanding debts will be written off in the event of a company's liquidation.

Creditors are prohibited from pursuing legal action against the business.

Any legal action that is currently underway is suspended.

After liquidation, the liquidator, who will wind up the company's affairs, is responsible for all interactions with creditors. Creditors are required to participate in the liquidation procedure and cannot bring a lawsuit against the business. Liquidation = Zero Debt


The business no longer exists.
A company ceases its existence when it is liquidated. Therefore, directors and members can no longer access the company's bank account or negotiate payment terms with creditors.

During the liquidation process, the liquidator must keep any cash deposited into the company's bank account after the liquidation date undisturbed and distribute it to creditors during the winding-up procedure.


Agreements for leasing, hiring, financing, and other services.
All contracts are suspended via the liquidation process. The liquidator has the power to continue with agreements, but the possibilities of a liquidator proceeding with a lease, hire, or credit deal are limited to none. However, if there are other agreements in place where the enterprise stands to generate more revenue for creditors, the liquidator will proceed with this arrangement.  But only if the company can continue to trade and earn more income for creditors.


Liabilities of directors and members after Liquidation
A director is personally accountable for a liquidated company's debt only if the director signs personal surety for the business's debt. Therefore, the debt, including SARS debt, will be written off.


Avoid expensive blunders!
To prevent significant errors or financial losses caused by dealing with an insolvent company for an extended period of time, follow the South African liquidation procedure. But please make sure that you only choose experienced liquidation experts like us. Contact us promptly so that we can help you in a cost-effective manner with a customised strategy. Liquidation = Zero Debt!!!