Dissolution of a company

This solution is a viable option in several situations, particularly when the partners no longer wish to continue the business together.

If the company is no longer conducting any business, it is also best to dissolve it, which will allow you to stop paying the various social security contributions owed.

In any case, the legally required procedure foramicable dissolution and liquidation must be followed.

This process can be complex and time-consuming, which is why we’re taking a look today at the steps you need to take to close your business

To vote on the dissolution of the company and appoint a liquidator

The dissolution must be approved at an Extraordinary General Meeting.

The partners are therefore convened in accordance with the provisions set forth in the articles of association.

At this partners' meeting, the following two resolutions must be adopted:

Decision No. 1

The partners approve the proposal to dissolve the company. This means the company will cease operations.

Decision No. 2

The General Meeting appoints a voluntary liquidator. This is a legal requirement. The role does not require any specific expertise and may therefore be filled by any individual: a company manager, a regular partner, or even someone from outside the company.

Liquidation proceedings

The voluntary liquidator appointed at the general meeting is responsible for carrying out the liquidation proceedings.

He must therefore settle the company's debts: this is referred to as the settlement of liabilities

After six months, he calls a meeting of the partners to review the situation and estimate how long it will take to complete all the operations.

Note: The liquidator is responsible for the tasks performed as part of their duties.

If he is at fault, he may be held liable.

Calculate the net result of the liquidation: profit or loss

Once the liquidation proceedings are complete, the liquidation will result in a profit or a loss, depending on the company’s financial situation.

In fact, each partner is entitled to recover the capital contribution they made to the company at the time of its formation

If the company is unable to return the capital contributions to each partner, this is referred to as a liquidation loss: the result of the liquidation is negative.

If the company is able to return the capital contributions to the shareholders and there is cash remaining, this constitutes a liquidation surplus.

This amount will then be allocated based on each partner’s share of the capital and taxed as income directly in the partner’s hands.

From the company’s perspective, the liquidation surplus is recorded at 2.5% of the value of the recognized liquidation surplus.

The procedures for deregistering the company from the Commercial Register

The dissolution of the company and the appointment of a liquidator are only the first steps in the process when partners wish to close their company.

In order to finally close the company permanently, it will need to be removed from the Commercial Register

Dissolution is, in a sense, the "death" of the company: it ceases to exist.

This deregistration must be completed once the liquidation proceedings have been finalized and the liquidation balance sheet has been prepared. This document, prepared by an accountant, is attached to an M4 form and filed with the court clerk’s office.

You must also provide the court clerk’s office with a copy of the resolution of the Extraordinary General Meeting approving the actions of the voluntary liquidator (a copy of the minutes).