Before explaining how to correctly carry out the extinction of a PYME, do you know what a PYME is? You have an article about what this type of companies are and what are their advantages with respect to the big companies.
When you start a company, you put all your hopes and efforts into it. Sometimes, for not having a good business plan, or simply the luck factor, the company becomes unviable. Then the most logical thing to do is to close it.
If you created a company and now you are in the situation of having to close it, read this article to see how to do it correctly. Three phases must be followed, which we will see below:
Dissolution of the activity.
The concept of dissolution of a company is not equivalent to extinction. It is the first step of a process that, if completed, will end with the extinction of the company. The dissolution is the social act or the circumstance that opens the process of liquidation of the entity.
First of all, you will have to change the legal status of the company to ‘in liquidation’. This means that the company continues to operate, although with some limitations.
For the dissolution of the company:
- The administrator will have to have called a Shareholders’ Meeting. At this meeting the dissolution resolution must be approved.
- The dissolution agreement must be notarized. Then it must be registered in the commercial registry and published in the corresponding bulletin.
Liquidation
The dissolution has as immediate consequence the opening of the liquidation process. It includes:
- Total or partial payment of debts (liquidation of liabilities).
- Distribution of the surplus of the corporate assets (liquidation of assets) among the partners according to the articles of association or, failing that, in proportion to their share in the paid-up capital.
Extinction
Once the Shareholders’ Meeting has approved the liquidation of the company, the following must be delivered:
- A public deed of extinction of the company.
- A final balance sheet of the liquidation.
- Payment of creditors.
- Payments to each of the partners.
This deed will have to be registered in the mercantile registry to cancel the registry entries. The books and documents of the extinguished company will also have to be deposited in the Registry.
At Moya & Emery we have a team of specialists in Corporate Law and Commercial Law who will be able to help you manage this process correctly.
If you would like us to advise you, do not hesitate to contact us.
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