FAQ – Liquidation

WHY SHOULD I USE FRANCOIS UYS INCORPORATED?

Francois Uys Incorporated has more than 22 years of experience and has helped more than 6800 people and companies with their debt, our panel of attorneys are experts in their respective fields with a combined success rate of 99% in Personal Sequestration matters & 100% in Company Liquidation matters.

Liquidation is the process by which a legal entity is dissolved because the business has become insolvent.
The Director/s will apply for Liquidation under the following circumstances:

  • The Business has stopped trading
  • The Business is insolvent, and its Liabilities exceed its Assets.

Attend a meeting with your Liquidator if possible;
All assets & liabilities must be fully disclosed to the Liquidator;
Assist the Liquidator as much as possible;

The process can take between 1 week and 3 months depending on the type of liquidation (voluntary or forced liquidation) however the administration process does not really involve you personally.

All legal actions stop immediately.

Any attachment by your Creditors put in force against the Company / Close Corporation after the commencement of the Liquidation is void.

The Directors or Members cease control of the Company / Close Corporation and the Master of the High Court will then Appoint a Liquidator whom will deal with all the matters of the Company / Close Corporation.

The Liquidators fee is based on a percentage of the sale of the assets.

Fixed Property:
3% from the Sale of Immovable Property,

Movable Assets:
10% from the sale of movable assets,

Cash
1% of cash in the estate etc.

When a Company is Liquidated, and it has no assets it costs the Liquidator a substantial amount to wind up the estate. In these circumstances we always advise our clients to pay the Liquidators fee and expenses because the Liquidator does not want to incur losses in the winding up process. The Director or Member may be sued by the Liquidator if there is contribution payable; (contribution? – amount short on minimum fee & expenses incurred during winding up process).

The Liquidator is appointed by the Master of the High Court by way of Requisitions received by Creditors. The Master of the High Court could also make a discretionary Appointment.

All Legal Action against your Company/Close Corporation stops immediately

Once instruction has been given to us you may request them to contact us, we will deal with them on your behalf or assist you in communicating with them.

Their contract with the Company / Close Corporation will cease to exist immediately. They will however have a preferant claim against the Insolvent Estate of the Company for any salaries outstanding.

Your employees stand second in line for payment after Creditors who hold security on bonds over immovable properties. They are preferent claims and the preference of their claims is determined as follows:

Salaries or wages (for a maximum of three months) are preferent up to an amount of R12,000.

Leave pay accrued in the year of insolvency or the previous year is preferent up to an amount of R4,000.

Any payments due for any other form of paid absence for a maximum of three months prior to date of insolvency is preferent in the amount of R4,000.

Severance or retrenchment pay is Preferent up to an amount of R12,000.

Contributions payable by the insolvent Company / Close Corporation as employer in respect of any employees to any pension, provident fund, medical aid, sick pay, holiday, unemployment, training or any other similar scheme is Preferent to the amount of R12,000.

Any amounts due to the employee over and above the monies for which the employee has a Preferent claim, becomes a concurrent claim. This means that he stands in line with the Creditors which do not hold security.

It is advisable to Liquidate the Company / Close Corporation as the Creditor cannot summons you to appear in court after Liquidation.

A requisition is a form, which Liquidators send to creditors requesting them to “support” his application to the Master of the High Court for his Appointment as Liquidator.

No.

This is at your discretion should you wish to claim. It is however advisable to first find out from the Liquidator whether there is any chance of contribution. If there is a contribution levied after you have submitted a claim, you may have to pay this to the insolvent Estate.