What are the formal processes to effect a liquidation of the companys assets?
The formal processes to carry out a liquidation of the company’s assets vary depending on whether the liquidation is voluntary or forced due to insolvency. If the liquidation is voluntary, the corporate shareholders meet to decide to dissolve the corporation and appoint a liquidator to conduct the liquidation process. A public deed of dissolution is granted and recorded at the Registry of Commerce. Once this deed is in force, the company’s name is followed by the phrase “under liquidation”. From that time only the liquidator can bind the debtor and execute any agreements on the debtor’s behalf. It receives an inventory of all assets and disposes of every asset to pay the debtor’s outstanding obligations, selling the rest to interested third parties. The proceeds of that sale are divided among the shareholders according to their equity participation. Once the liquidator has concluded the liquidation process, a public deed of liquidation is granted and recorded at the Registry of Commerc
