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Dissolution of the company
The importance of company dissolution is due to a process of formal and official closure of the company. The terms “formal” and “official” imply that the company no longer exists in public registers. There are several ways to shut down a business, and each way has a slightly different process. In general, however, dissolution is the natural result of either of these processes. Two of the most common ways to dissolve a company are through liquidation or bankruptcy.
Liquidation of a company
Liquidation is a voluntary decision and means that shareholders will vote to close the company (or if there is only one owner, he decides to do so). After completing all formalities and submitting all applications, the liquidation process can begin. The further process depends on the legal form of the company and the jurisdiction. For example, some less complex legal forms can typically be resolved in a few days, while the entire process can take up to three months or even longer to resolve other legal forms. Everything is based on the size of the property, the number of creditors and the overall complexity of the case.
Register for bankruptcy
The bankruptcy process is usually enforced: it is petitioned by creditors, third parties or the owners of the company if a company is unable to pay its liabilities during the liquidation or bankruptcy proceedings. The bankruptcy process takes longer than the liquidation. In most countries, a court decision is required to initiate the procedure.
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