Liquidation Process
Procedure for Official Liquidation
Liquidation is the process of closing down, winding up or dissolving a company.
Types of Liquidation
- Official Liquidation
- Private Liquidation
- Dissolution
Modes of liquidation
By a special resolution of the company through
- Petition addressed to the registrar
- Petition to the court
- By conversion from a private liquidation to official liquidation
Process involved in executing official liquidation
- The official liquidator requires funds to execute the liquidation.
- The official liquidator requesting for the statement of affairs from all the directors of the company
- Publication of the liquidation order in the gazette
- Notice in a national daily newspaper calling on all creditors to file their proof of debt before a fixed date and calling on debtors to pay up or make arrangement before a fixed date to pay their debt.
- Publication of first creditors meeting by the official liquidator to bring the creditors the state of liquidation.
- Gathering of the veto of the company by the official liquidator.
- Publication of second creditors meeting
- Selling of the assets of the company to pay creditors.
Private liquidation / voluntary liquidation
Private liquidation is a process designed to allow an insolvent company to close voluntarily. The decision is made by a board resolution but instigated by the directors 75% of the company’s shareholder must agree to liquidate for liquidation proceedings to advance.
- Affidavit of solvency by the directors of the company
- Special dissolution for the winding up, include appointment of liquidator. The special dissolution is passed by the members
- Directors of the company should file annual return and auditors account up to days
- The Registrar of Companies may issue section 248 attached to the special resolution filed by the members of the company to be gazetted in the bulletin
- After the gazette of the special resolution in the bulletin, the Registrar of companies will issue section 260 (1) of the Companies Act to strike the company name of the company register
- The Registrar will proceed to cancel the companies name from the company registrar, after the 260(1) has been gazette and a copy has been sent to the registrar of companies
- Publication of second creditors meeting
- Selling of the assets of the company to pay creditors.
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