Company Dissolution
To start the Dissolution process which may take about 1 to 2 months (or more, depending on the jurisdiction and complexity), a declaration of solvency and proof that the company does not have any asset or liabilities will be required.
Thus if an IBC does not have any assets or liabilities, it will have to submit:
- 1. Bank statements / Closure letter from the bank.
- 2. Declaration signed by the directors / Beneficial Owner that the company does not have any asset nor liabilities.
- 3. Resolution of Dissolution signed by the director(s) / shareholder(s) of the company, which will also approve appointment of the liquidator.
- 4. Plan of dissolution signed by the director(s).
The above documents must be sent to the company’s registered agent within 21 days of the passing of the resolution, who will prepare and submit a request, together with extract of the resolution and plan of dissolution to the Registry. The Registry will register the dissolution and the liquidator will thereafter publish a notice in the local news paper within 40 days of the registration of the dissolution. It is also required to publish the same notices in the countries where the IBC has had any activity and providing copies to the Registry.
The liquidator will then issue a statement, which will be registered with the registry and thereafter the registry will issue the Certificate of Dissolution.
FAQs pertaining to company dissolution
1. Can any company apply for dissolution/deregistration?
Yes, any company, regardless of the jurisdiction, can apply for dissolution. SFM can take care of the dissolution process for you. Prices vary from one jurisdiction to the other, and also depending on the amount of accounting work if needed.
2. What are the requirements for a company to be dissolved?
This will depend on the jurisdiction and procedure selected, the company must meet the following conditions before making an application for dissolution :
- The shareholders of the company should formally agree to dissolve.
- The company should not have any outstanding assets or liabilities.
- The company should not be involved in any litigation.
3.Does the company need to file all outstanding Annual Returns before delivering the application for deregistration/dissolution ?
Yes. A company is usually required to file Annual Returns and observe its obligations under the applicable Companies law in general, until it has been dissolved. Failure to do so could have consequences such as preventing the deregistration/dissolution or make the company liable to prosecution.
4. How can I restore a deregistered company?
An application for the restoration can be made to the Registrar or the relevant Authority of the relevant jurisdiction. SFM can take care of this process for you. If your company was struck off, it may be possible that the company’s name may no longer be available.
5. What are the differences between winding up, dissolution and striking off?
Winding up is the process of settling the accounts and liquidating a company’s assets to extinguish existing liabilities and finally permit the distribution of the net assets to the shareholders. It is part of dissolving the company.
Dissolution: dissolution is the entire process of formally closing down the company, from winding up to the striking off from the Company Registry. It aims at protecting you against future liabilities.
Striking off refers to the Registrar of Companies literally striking the name of a company when there is reasonable ground to consider that a company is no longer meeting the conditions for being registered. The strike off may be compulsory, for instance as the result of a lasting failure to maintain a situation of good standing, or be the result of a dissolution/deregistration procedure. Striking off is a statutory power and responsibility of the Registrar.
6. How long does it take to dissolve a company?
This depends on the jurisdiction of incorporation – i.e. on the applicable procedure – and on the status of the company’s business. For simple cases where companies have no liabilities and where all documents are up to date, the process generally takes about 45 days. For more complex cases, the process can take up to one year.
7. Which document I will get once my company has been dissolved?
The most standard document is a Certificate of Dissolution issued by the Company Registry.
