What is the difference between dissolving and liquidating a company
If a corporation’s board of directors decides that the business needs to be wound down, there are a number of legal paths to consider.Determining the best approach is fact-dependent, and the corporation and its board should get legal advice before making a decision.It will usually take between /- 3 to 7 months for the Companies and Intellectual Property Commission (CIPC) to effect the deregistration.Note : If a company is deregistered any interested person may apply to the Commission to reinstate the registration of the company.The most important difference between bankruptcy and winding up is that in a bankruptcy proceeding the property of the bankrupt passes to a trustee who is appointed by a court to sell the property to pay the debts of the bankrupt party.
These provisions apply equally to a listed company, a public limited company as well as a private limited company.Once this is done, the debtor is given a discharge, which cancels the rest of the debt permanently.The entire process takes about three to four months after the bankruptcy paperwork is filed, if everything goes smoothly.Broadly speaking, there are two different ways to go bankrupt: liquidation (Chapter 7) or reorganization (Chapter 11 or Chapter 13).In the next two sections, I will introduce you to these two variations and explain, briefly, how they apply to both individuals and companies.
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This is a relatively simple, inexpensive, and quick procedure for dissolving non-operational private companies that meet certain requirements.