How to Initiate the Process of Liquidation

The creditors and contributories of a company collectively and/or severally, may file an application for the liquidation of the company to court under the conditions stated by Chapter 113, Company’s Law.

In addition, if first meeting of establishment is not held or the general assembly report is not submitted in the meeting, liquidation application can only be made by the shareholders 14 days later of the last day of the meeting.

However, in the event that a person who is a claimant or likely to be a claimant in the future may also file a request for the liquidation of the company. The applicant can only make this petition provide that the applicant provides the Court with a security for the litigation expenses and if the Court decides that the liquidation has a just, necessary or a reasonable ground. In the case of voluntary liquidation subject to supervision by the Court, the liquidation claim may be submitted by the official Court officer or other authorized person related to the Court, but the Court must be satisfied that the interests of the company's associates and creditors are not adversely affected or that there will be no injustice in the liquidation order. Voluntary liquidation should start from the date of the decision to issue the liquidation and the other liquidations start from the date of the petition. It has been concluded by the Supreme Court that the Court's discretion was not to determine the date of commencement of the liquidation, but to accept that certain sell-outs can only be valid once the liquidation starts.

Is it possible to stop the liquidation process?

Another important point related to the filing of the liquidation request is that after the liquidation claim has been filed and before the liquidation order has been issued, the applications can be made to the Court in order to stop the company's suspended lawsuits. Likewise, after the liquidation order has been issued, a lawsuit cannot be brought against the company which has been liquidated without the Court's permission and without being subject to the limitations of the Court.

Liquidation process and termination

The liquidation officer or the temporary liquidator appointed according to circumstances shall take over all the assets of the company and all the assets that appear to be the rightful owners through the case after their appointment. In addition, the liquidator may request the transfer of the property on behalf of the company. The liquidator also has the authority to defend a case for the claims of the company and to defend for the lawsuits filed against it in order to carry out the liquidation more effectively. The powers of the liquidator may vary for each type of liquidation. In general, the liquidator, after the appointment of liquidator and after liquidation order takes control of the property of the company, ensures the collection of the receivables of the company by means of litigation or reconciliation, it makes agreements to pay the debts of the company and ensures that the debts of the company are paid according to the priority of the receivers. Once the liquidation of the company is completed, the last meeting is held and the report showing that the company has been liquidated is submitted to the TRNC Registrar of Companies and the dissolution of the company officially takes place.