How to close an offshore company

The question of how to liquidate an offshore company is a popular one. In most jurisdictions it is possible to close a firm under a simplified procedure. State laws mention how to carry out voluntary or forced liquidation. It is possible to liquidate a company within a year after the non-payment of annual fees without the participation of the owner.

Peculiarities of liquidation

The procedure for the liquidation of an offshore company may vary in complexity depending on the country. There are only a few ways to close a company. To learn more about how to close a company and which method is most suitable for you, please contact our experts at IT-OFFSHORE.

Some owners of the company in order to save money simply " leave " the firm and stop making annual payments. This method has many disadvantages - there is a risk that over time all assets will be confiscated and it will be impossible to return them. The director will probably be responsible for possible debts, so it will be more difficult to reopen the organization.

The closing of a firm that has no obligations with the presence of assets can be done by going through a full closing procedure. If the company has assets at the time of liquidation, those must be distributed according to the instructions. A liquidation plan must be drawn up and a liquidator appointed. At the end of the procedure, the company is removed from the registry and a liquidation certificate is issued. Alternatively, the company is reorganized through a merger or acquisition.

Stages of voluntary liquidation

It is possible to close a company voluntarily provided there are no debts. If there are unliquidated obligations, they must be paid in advance. The first stage is the preparation of papers. The decision to terminate the company is made by the participants.

What documents are required:

• Declaration of solvency;
• The liquidation plan;
• Reasons for the liquidation with the expected closing time.

After that a liquidator is appointed by the decision of the directors. Only a natural person may be a liquidator. Before starting work, a person is required to confirm consent to the appointment. The liquidator must sell and protect assets, identify the creditors of the company, ensure repayment of debts, distribute the remaining assets and prepare a corresponding report to all members of the company.

After all necessary procedures have been completed, the liquidator shall send a notice to the Register of Companies that the liquidation has been completed. The companies are then crossed out in connection with the liquidation and a certificate is issued.

The timing of liquidation may vary depending on the need for prior settlement of obligations, the length of preparation of documentation, the presence of outstanding debts in the company, legal proceedings, etc. On average, the closing time is about 2-3 months.