Company : dissolution and liquidation

If you want to put an end to the activities of your company, we are talking about dissolution and liquidation. What does these concepts mean?

An individual wanting to end his commercial activities voluntarily must contact - within a month of the cessation - a one-stop business counter so that the latter can take the necessary steps. 

How do you stop a company ?

When a company wants to cease its activity, it proceeds in two stages: dissolution and liquidation.

WHAT IS A COMPANY DISSOLUTION?

The term "dissolution" implies a decision made by the shareholders to liquidate the company and, generally, to appoint a liquidator in charge of this task.

What is company liquidation?

The term "liquidation" implies the pecuniary realisation of all the company's assets and the clearance and payment (if possible) of all the company's debts (= liabilities) by the liquidator.

If there is any remaining money after this procedure, the latter must be divided up between the shareholders as set out in the articles of association. Then a definitive end can be put the company's activities at a one-stop business counter.

The legislator has introduced a watchdog to monitor dissolution and liquidation procedures: the commercial court.

Wen is a company dissolved ?

Voluntary dissolution and liquidation

The shareholders want to close their company.  This can be done with a single deed with a notary to cut costs and to close the company more quickly. To do this, you must provide the notary with a report from the statutory auditor or, failing that, an external auditor or chartered accountant. The cost to the notary for this simplified procedure is around €1,500.

In the context of dissolution through several deeds, the company will enter a liquidation period with the first notary deed (approximate cost of 2,200 Euros) and then a liquidator will be appointed to oversee the liquidation (fees approx. 3,000 Euros per year). This liquidator must be approved by the commercial court before any intervention.

Then, at the end of his mission, he presents the closing accounts for validation by the commercial court and a new notarised document allows the closure of the liquidation (approximate cost if 1,800 Euros).

At the end of the liquidation, the company continues to exist for five years as a passive legal entity, which means that creditors may still approach the liquidator.

Legal dissolution and liquidation

By means of a ruling, the court decides to dissolve the company.  This may be at the request of a right-holder (a shareholder for example) or at the request of the royal prosecutor (for example, because the company has not filed its annual accounts for three consecutive years).

AUTOMATIC DISSOLUTION AND LIQUIDATION

A company is automatically dissolved when it has : 

• either has been formed for a limited period of time,
• or when a condition in the articles of association is fulfilled (e.g. a clause can be inserted in the articles of association stipulating that the company will be dissolved automatically upon the death of the sole shareholder).

Beware! Companies having received grants from the Brussels-Capital Region must fulfil a series of conditions. Thus, investments associated with these grants must be kept for a period of between three and six years. If these obligations are not respected, the amounts received must be repaid. For more information, consult the Brussels Regional Public Service.