The dissolution and liquidation of a company are not instantaneous, they are two separate steps. These transactions are decided by the general meetings of shareholders in attendance of a notary.
Prior to the first Extraordinary General Meeting, the Management shall draw up a special report on the dissolution proposal to which is attached an active and passive situation of the company in attendance of dating back no more than 3 months old to the date of the notarial deed. This situation is subject to review and report by the auditor.
This situation is established under discontinuity assumptions: the establishment costs are fully amortized, the carrying amounts are reduced to their probable liquidation values and provisions must be recognized to cover the expenses resulting from the cessation of activities. The auditor must decide on the complete, faithful and correct nature of the balance sheet.
The statutory auditor aims to protect the associates.
The general meeting appoints a liquidator, often the manager or a director, who will be confirmed by the Commercial Court.
The role of the liquidator is to liquidate the assets of the business, which means turning the assets into cash by way of sale or collection, in order to clear the liabilities.
Dissolution and liquidation in a single act, namely with the immediate close of liquidation, is possible when all debts to third parties have been reimbursed or the necessary funds have been deposited. Shareholders debts (advances provided, current account credit, etc.) are not taken into account.