Wind Up Wind Down

Whether sequestration or company liquidation, an insolvency practitioner plays an important role in these legal processes. Insolvency Practitioners, or IPs, help you navigate the legal situation during your financial distress. In this article, let us understand the role of an insolvency practitioner during bankruptcy in South Africa.

Whether solvent or insolvent, a company can decide to liquidate, pay its creditors, and wind up its business operations. Let’s talk about the effects of Liquidation on a company in South Africa and what happens after the order is granted, i.e. to the company, employees, creditors, SARS, directors and shareholders.

When a company in South Africa reaches the end of its operational life, it may consider ceasing its activities. Companies may either consider deregistration with the CIPC or liquidation via a court order. While both result in the company being removed from the official register, they differ significantly in purpose, procedure, and financial implications. In this article, we understand the difference between company deregistration and company liquidation in South Africa.

Since April 2011, Close Corporations (CCs) have not been registered under the Close Corporation Act 69 of 1984 in South Africa. However, existing CCs can still operate and can be liquidated when needed. In this article, we talk about how a Close Corporation can undergo liquidation in South Africa.