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Process after liquidation

We would like to give you a short breakdown of the liquidation process in order to assist you to understand the liquidation process:

 

  1. The final liquidation order is obtained obtained.
  2. The Master of the High Court has convenes the First Meeting of creditor.
  3. The purpose of the First Meeting is for considering the state of the company’s affairs and the nomination of a person or persons for appointment as liquidator or liquidators. The meeting is also convened for the additional purpose of proof of claims against the company. It is common practise that creditors do not attend these meetings and give a Power of Attorney in favour of a nominee to attend the meeting on behalf of the creditor(s), and to vote for the appointment as the final liquidator.

  1. The final liquidators must convene within a period of 3 months, after they have received their final letter of appointment, the Second Meeting of Creditors. The purpose of the Second Meeting of Creditors is the proof of claims against the company, the furnishing of the liquidator(s) of his/their report on the affairs of the company and the giving of directions to the liquidator(s) in connection with the administration of the winding up.

  1. The liquidators can at any stage convene a General Meeting of Creditors in the winding up of a company for the purpose of his/them obtaining authority or sanction with the respect to any matter arising in the administration of the winding up or for any other purpose he/they may consider necessary.

  1. The liquidators must within a period of 6 months after their letter of appointment has been issued, lodge the First Liquidation and Distribution Account, but they are entitled to apply to the Master of the High Court for extension of that period, if there are valid reasons to do so. When all the assets of the company have been realized, the liquidator lodge a Liquidation and Distribution Account at the Master of the High Court, who examines the Account (this process can take anything from one month to six months) and, if satisfied, gives consent to the liquidators to advertise the Account to lie for inspection for a period of 14 days.

 

  1. If no objections were lodged, the Master of the High Court will confirm the Liquidation and Distribution Account in terms of which the liquidator is entitled to pay dividends to creditors.

 

The above is a short break-down of the administration process in the liquidation of the company. The liquidators are constantly in the process of investigating the compliance by the directors of the company, the assets and liabilities, contracts, dispositions and any voidable transactions.

 

If the liquidators feel that it is necessary to proceed with a formal Insolvency Enquiry, they will report to creditors in this regard. Creditors can however also initiate further investigations by providing information to the liquidators and they are also entitled to call for an enquiry to be held to investigate further actions against creditors, directors and/or officials of the company, if they have proof their claims.

 


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