Trading is tough in this economy. Businesses are folding left and right, bogged down by sluggish recovery, suffocating SARS debt and high wages. Perhaps you are among the struggling, haunted by debts your business cannot settle and work your business cannot finish. The fear, stress, worry, and sleepless nights must be taking a toll. There is a way out: voluntary liquidation. Voluntary liquidation will allow your business to shake off its debts. Your fear, stress, and worries could vanish in a snap and you may continue to trade.
We can liquidate your business in 5 days and you can stop to worry and sleep at night.
The following is a FACT and has been proven over and over again:
- Debt (especially SARS) eats your cash flow.
- Debt (SARS especially) eats your profits.
- Managing debt that your business cannot pay eats away at your cash flow, confidence and peace of mind.
- Worries and fear of SARS hang over your head 24/7 as you expect the worst.
What Does Liquidation Mean
Here are some compelling reasons why liquidation is the route to follow to get rid of the above:
- Liquidation writes off the debt of the business. (*Liquidation does not write off sureties, and it does not write off customs and excise taxes or traffic fines)
- Once you have liquidated the business, you can grow your business without the problems and keep the profits instead of having to pay them to creditors.
- You should have peace of mind after liquidation, which will enable you to confidently build your business.
- Section 22 of the Companies Act compels you to liquidate a business that cannot pay its debt or where the liabilities exceed the assets. If the business is not immediately liquidated, the director/member/trustee can be held personally liable for the debt of the business. The sooner you liquidate the business, the safer.
Liquidation allows you to keep on trading
Liquidation stops the debt problem. Liquidation frees up your energy as you are not worried and stressed any longer. Liquidation frees up your cash flow as there is no more debt to pay. It is the shortest route to the quickest solution.
When Can You Liquidate a Company
A business should liquidate as soon as the company cannot pay its debt. This timely action can prevent further financial decline and protect the interests of both the business owners and creditors. A company can liquidate at any time, even if there is litigation pending or if there is a SARS compromise being negotiated or was negotiated and agreed upon. The sooner a struggling company liquidates, the better.
How to Liquidate a Business
The liquidation requires a liquidation lawyer. Beware of persons who are not lawyers and persons who do not specialise in liquidation. It is a complex legal field that requires expertise. The writer of this article is a liquidation lawyer who has delivered liquidation services to countless business owners over the last 17 years. That is the first step: use an expert.
Once the decision was made to proceed with voluntary liquidation, there are documents to be signed (that we will draft) and lodged at the CIPC. It then takes about 3 – 5 days and the company is liquidated. After liquidation a liquidator is appointed who will stand in the shoes of the directors and the company’s affairs will be finalised. If there are assets the assets will be sold and the proceeds paid to creditors. If there are no assets no one will get paid and the liquidator will wind up the insolvent estate of the company in terms of the Insolvency Act, 1936.
The Benefits of Liquidation
The company liquidation process in South Africa not only provides a means to get rid of business debt but also allows for a business to get a fresh start. By eliminating debt, businesses can focus on rebuilding and restructuring in a way that is financially sustainable and poised for future growth. Voluntary liquidation means ceasing operations, selling off assets, and using the proceeds to pay creditors. Once completed, the company is dissolved and can no longer trade, providing a clear end to financial distress.
