When a business is no longer able to pay its debt and it’s liabilities exceed its assets, the liquidation process is often initiated. Liquidation implies that the company will cease to operate. The application to liquidate the business may come about as a result of the legal court process, or by request of the creditors of the company – or if the company owners voluntarily decided to liquidate. Below and in the complimentary pdf download, we explain the Liquidation Application process, be it opposed or unopposed.
Once an Applicant has lodged the Liquidation Application, the Respondent who is cited in the Liquidation Application has a certain time period, in terms of the Rules of Court, to oppose the Liquidation Application. If the Respondent complies with the Rules of Court and attends to the service of the Notice of Intention to Oppose the Applicant’s Liquidation Application, this Application is known as an Opposed Liquidation. But if the Respondent formally served their Notice of Intention to Oppose but failed to serve their Opposing Affidavit, the Application would be deemed an Unopposed Liquidation Application. The Liquidation Application would also be classified as unopposed if the Respondent fails to serve their Notice of Intention to Oppose in terms of the Rules of Court’s provided time period.
The downloadable flow chart indicates the Liquidation Application’s process for opposed and unopposed Liquidation Applications. Click on the image below or here to download your copy.
Once a Court Order for the Final Liquidation of the Company is provided, a liquidator is either appointed by the creditors of the insolvent company or by the Master of the High Court. The appointed liquidator will then represent the interests of all the creditors and supervise the liquidation process by collecting and realising the company’s assets by turning them into cash; discharging the company’s liabilities and then distributing any funds in accordance with the Insolvency Act, 24 of 1936. Upon finalisation of the liquidator’s formalities, the company will be formally dissolved.
