Voluntary liquidation is initiated in case of cessation of activity of a viable company
The judicial administrator is then endowed with a closure mission. He finalises the accounts and distributes the proceeds of liquidation pro rata to the number of existing shares.He exercises his powers in the respect of the decisions of the General Meeting opening the voluntary liquidation.
Voluntary liquidation puts an end to the company’s life; and leads to its removal from the register. Reasons may vary:
- legal dissolution pronounced
- decision to dissolve voted on General Meeting by the shareholders
- expiry of the term of life of the company’s mandate
- extinction of its purpose
- cancellation of company contract
- dissolution for a reason provided by the statutes.
Voluntary liquidation is not an option if the company is in default.
The liquidator is appointed by the General Meeting of shareholders, which determines the scope of his mission. A supervising committee may be set up. The length of the liquidation operations is usually limited to 3 years. In practise, it lasts about 18 months.
CONDUCT OF PROCEEDINGS
The judicial administrator (acting as « liquidator ») first compiles an inventory of the assets and liabilities of the company, making sure that the company is not in a default situation. Then, he proceeds with all administrative requirements necessary to the liquidation:
- accounting records
- closing or sale of sites, cancellation or transfer of contracts,
- disposal of assets
- payment of all amounts owing on accounts
- dispute and litigation resolution,
- preparation of the annual accounts within 3 months following the closure of each fiscal year.
The liquidator keeps the shareholders informed on a regular basis, of his actions. At the end of his mission, the proceeds of liquidation are distributed pro rata to the number of existing shares.
A full service management The judicial administrator (acting as liquidator) replaces the management of the company and exercises full authority on their behalf.
Precision in the application of the procedures The procedures employed in the liquidation are the same as those applied daily by the administrator in insolvency proceedings.
A legal protection Throughout the proceedings, the liquidator administrator may be liable to civil and penal actions. Non-professionals assuming these tasks are often unaware of potential legal ramifications of their acts or failure to act. A judicial administrator or liquidator is protected against this by their professional body, which automatically insures all its members (individually and jointly) against future claims/ professional error.
ROLE OF CHIEF EXECUTIVE OFFICERS
The powers of management (agents, manager, board directors, or supervisory board) end when the liquidation proceedings begins.
Only the general meeting of shareholders and the auditor carry out their task. The liquidator replaces the management of the company. Nevertheless, a supervising committee is often established, in which the former chief executive officer participates in (especially if he is a financial partner).
The closure of liquidation proceedings is made official by a General Meeting of the shareholders who then dismiss the liquidator. The legal personality of the company disappears once the formalities of liquidation are published.
The liquidator then concludes his mission by distributing the proceeds of liquidation pro rata to the number of existing shares
FHB MAIN REFERENCES
SIGEA (Elf tower Property Management), UNIFED SOFINAC (coffee and chocolate trading, 50 employees), SCI CHATEAU DE NOUAILLES (movable and real estate management).