Liquidation of limited liability companies is regulated by provisions on liquidation proceedings in the Limited Liability Companies Act. The General Meeting decides on the placing of the company into liquidation. The decision shall be made by qualified majority. In addition to what is provided in the Articles of Association, an invitation to a General Meeting that will decide on liquidation must be sent in writing to the shareholders whose names and addresses are known to the company.
The purpose of liquidation is to
ascertain the financial position of the company
convert the requisite amount of assets into cash
repay the company’s debts
return the surplus to the shareholders or others, as provided in the Articles of Association.
When the decision on liquidation is made, one or several liquidators must be appointed at the same time to replace the Board of Directors and, where appropriate, the Managing Director and the Supervisory Board.
The liquidators will manage the affairs of the company during the liquidation. They must, as soon as possible, convert enough of the assets of the company into cash, so that the liquidation can proceed, and must repay the debts of the company. The business operations of the company may be continued only to the degree called for by an appropriate liquidation process. The term of the liquidators is indefinite. The company is deemed to be dissolved, once the liquidators have presented the final accounts to the General Meeting.