Some entities resort to liquidation as a result of dispute between owners, or for any other reasons, for which owners resort to liquidation. Liquidation is subject to legal and accounting requirements, which must be followed.
Liquidation is one of two types, voluntary and involuntary liquidation. Voluntary liquidation is made by resolution of the owners of capital. This is either to be a “voluntary liquidation for the owners,” which is decided by the owners of capital when the assets’ value of the entity’s is in excess of its debt, in the sense that the entity is able to repay (solvent), or “voluntary liquidation for creditors”, which is undertaken mainly at the request of creditors when the entity’s assets cannot cover its debts. Thus, the entity is in the state of insolvency. On the other hand, involuntary liquidation is made on court order for a lawsuit against the company.
Our services include, listing all assets and liabilities of the entity under liquidation. Then, we implement liquidation procedures, sale of entity’s assets, collect its receivable, pay its debts, and distribute the remaining (if any) to owners according to their legitimate interests after deducting their outstanding balances. Thereafter, we prepare liquidation accounts in accordance with the requirements of applicable regulations; send liquidation reports to the party who appointed us and the owners as well. Eventually, we prepare the final accounts based on liquidation work, to be approved by all owners, in preparation for the completion of the liquidation and the dissemination of the liquidation completion via methods set forth in regulations.