Questions & Answers
The difference between dissolution, liquidation and bankruptcy
Dear sir/madam,
I have a small civil company for consultancy activity (not an LLC). The company has debts that we have not been able to pay. One of the partners is refusing to cooperate and refusing to sign a company closure contract for mutual dissolution of the company.
A) What steps can I take to dissolve the company?
B) Is there a difference between "dissolution", "liquidation" and "bankruptcy" for a civil company?
C) What are the rights of the creditors of the civil company after the company is no longer existing?
D) What happens to earlier existing execution cases against the company after the company is no longer existing?
Thank you for your replies and assistance over here!
I can visit the offices of the lawyer who makes an informative reply here to negotiate to represent me for this issue.
Dear questioner,
Pursuant to the query, we need to know the matter in detail to give you proper advice. As a general, we can share our thoughts on your queries as follows:
A) Regarding the dissolution of the company, various remedies or steps can be taken, such as shareholder vote, to resolve the issue or you can file a lawsuit to force dissolution. The court may make appropriate orders to dissolve the corporation.
B) Dissolution means it is a formal death of the company. Whereas liquidation is a part of overall dissolution like selling off assets, turning them into cash or cash equivalents which are then distributed to creditors and owners according to priority claims.
Bankruptcy is a legal procedure held by the court when an organization is unable to honor its financial obligations or make payment to creditors, then, it files for bankruptcy.
C) We need more clarification regarding this.
D) The license of the company cannot be canceled until the execution file is closed.
Further, we need to know your matter in detail to give you proper advice.
Kindly contact us via phone or email for further assistance.
Hi questioner,
When there is a non-cooperative partner, the only option is to file an appropriate proceeding in the court to close the company.
For further details and discussion, you can visit our office or contact us via phone.
Regards,
Liquidation can be mutually agreed upon, can be enforced via court order upon one partner's request and can be mandatory if reached to a certain limit of loss, otherwise, partners will be personally liable.
For more details, please contact me.
Sayed Abdalla
