Start Effects of liquidation on the liquidating corporation

Effects of liquidation on the liquidating corporation

The liquidator is then tasked with making a decision, within a reasonable period of time, whether or not he or she intends to abide by the contract or terminate it, depending on what would be most beneficial to the creditors.

She says however, that employment contracts are suspended upon liquidation of the employer.

During the suspension period, the employee is not obliged to render any services to the employer, and is not entitled to receive any pay or employment benefits arising from the contract.

If the business has undergone voluntary liquidation and there is still debt owing to SARS after the winding-up of the business, she says the shareholders may, in terms of the Tax Administration Act 28 of 2011, be held personally liable in certain circumstances.

The two types of liquidation for an insolvent company are: A creditors voluntary liquidation is a liquidation initiated by the company.

However, the shareholder(s) making the request must pay the costs of calling and holding these meetings.

A committee of inspection assists the liquidator, approves their fees and, in limited circumstances, approves the use of some of their powers.

For every business success there are also those stories of failure and there are a few other places that this reality is as stark as in South Africa's startup landscape where the failure rates is high as 80% within the first two years, with the rate increasing in the third and fourth year.