Liquidation does not necessarily have to happen only as a result of your company going bankrupt. Sometimes there are other reasons to do so, which might have nothing to do with insolvency. These could include:
Sixty-seven year old Charlie is the head of a craft enterprise and plans to retire after decades of successful work. His greatest wish is that one of his children should take over the family business and continue to run it. However, none of them seem to be interested in this, but Charlie still doesn’t want to see his life’s work in the hands of an external buyer. Instead, he decides to liquidate his company. As the sole shareholder, he can decide to dissolve the company of his own initiative, and start filing for liquidation whenever he sees fit.
Somewhat frustrated that his family business is coming to an end, Charlie is reluctant to deal with the settlement details himself. So, he hires his old friend Carl, a person he trusts and who has the necessary professional skills, and appoints him the official liquidator. From now on, Carl will take care of anything associated with liquidating Charlie’s company – including the public dissolution announcement and informing creditors, as well as handling the accounting aspects.
Within the financial year, Carl is able to sell all the company machines, resulting in a considerable sum of liquidation proceeds. Charlie does not have to include the land his company is located on in the procedure, since he wants to keep it. Once all the creditor claims have been satisfied and all necessary liquidation measures have been taken, Carl officially dissolves the company and removes it from the Secretary of State’s register. Charlie takes responsibility for the business books and documents with the intention of safeguarding them for the next decade. Now, he just has to wait until the end of the mandatory blocking year to start withdrawing from the company’s assets.