It is the only debt that goes over to the person of the director s or the member s or the trustee s without the necessity of surety. So timing of the liquidating of a Company or Close Corporation is everything. One can only sequestrate, in terms of the Insolvency Act, if one owns a property or other big, fully paid assets or if one has cash. There is nothing in our law that prohibits anybody from trading in another entity, so one can proceed with business as usual in a new entity. These two provisions the latter being known as the deeming provision were mirrored in the old Act under s f as read with s You can therefore legally liquidate one entity while you start trading in another. If one cannot make out a benefit to creditors, the Court cannot grant the order. Many threats are issued to liquidate, but creditors do not necessarily proceed. Sometimes entities are on the edge of solvency and insolvency. The entity must then cease trading. It is always better for the entity to bring a voluntary liquidation application first, as opposed to being liquidated by a creditor. The liquidator will then determine the assets of the entity, hold meetings with creditors and proceed to sell assets, collect outstanding debt, pay creditors and finalise the estate, after which the matter will be closed.
The reason for this is because of the obligation to liquidate so that Companies and Close Corporations do not trade for too long in an insolvent position to the detriment of staff and creditors. With liquidations this is different — one approaches the court straight away and then the matter is postponed where after notice must be given to all affected parties creditors. If an entity has no assets, it will not be really worth the while of any creditor to liquidate the entity, because liquidation is one of the more expensive application procedures in the law. We have helped hundreds of business owners to stay on their feet with this process. These documents will be served on the entity at its registered address as supplied in the aforementioned Affidavit. Accordingly, and in the absence of s 68, s 69 could not be relied upon to liquidate a close corporation. If one does not own property and if one does not have a certain amount of cash, then one cannot sequestrate. You are welcome to contact us to discuss for more information. The liquidator will then determine the assets of the entity, hold meetings with creditors and proceed to sell assets, collect outstanding debt, pay creditors and finalise the estate, after which the matter will be closed. Featured Attorney Article by listed Attorney: During this month, the applicant the entity must give notice to all creditors of the provisional liquidation order by sending them a copy of the court order. They scratch harder and can make life difficult for you unnecessarily. No use liquidating the entity but you end up paying the debt in your personal capacity in any case! How can I carry on with business after the liquidation of a Company or Close Corporation? If they have a nasty liquidator and his mandate will most probably be to aggressively test whether the entity is hiding assets , then you may be in for a nasty experience. One never wants to give control to a creditor, because if a creditor brings the liquidation application, it is usually aggressive because they are upset with the entity. It is important though that you do it right and the process is well structured. If one cannot make out a benefit to creditors, the Court cannot grant the order. We can assist with this. All share transfers after commencement of the winding up process is void Disposition of any property after commencement of the winding up position is void. It is the only debt that goes over to the person of the director s or the member s or the trustee s without the necessity of surety. Before the enactment of the new Act, s 66 1 of the CC Act held that the provisions of the old Act which related to the winding-up of a company applied to the winding-up of a close corporation only in so far as the provisions could be applied in respect of any matter not specifically provided for in the CC Act. The purpose for a creditor to liquidate an entity would be to have the assets of the entity sold so that the creditor can rather get something than nothing. Who paid for the vehicle? This affidavit will set out the debt of entity and a short bit of history as to why the entity needs to liquidate.
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