The process of company liquidation in Gibraltar is outlined in the Companies Act 2014. Investors who are no longer able to do business here, or those who own companies that are no longer profitable, have the option of dissolving the legal entity.
Our company formation agents in Gibraltar can assist business owners who are interested in company liquidation, the striking off of a company, or insolvency.
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Ways of liquidating a company in Gibraltar
Company liquidation or dissolution in Gibraltar is voluntary or compulsory. In the case of voluntary dissolution, it can occur at the request of the shareholders or the creditors, while compulsory liquidation falls under the governance of the Insolvency Act and occurs when a Gibraltar company is no longer able to pay its debts.
Voluntary dissolution in Gibraltar
Voluntary company liquidation in Gibraltar implies the dissolution of the company while it is still solvent. In order to assert this, company directors must offer a statutory declaration of solvency.
Based on the declaration, the company will appoint a liquidator who will take over the business’ assets and debts, liquidate all debts and any remaining amount will be distributed among the shareholders.
Also, upon voluntary company dissolution, the following documents must be filed with the Gibraltar Companies House:
- the declaration of solvency, which must be filed within 15 days after it’s been prepared;
- a special resolution to dissolve the company, which must be filed within 30 days after the declaration of solvency was submitted;
- a statement appointing the liquidator, which must be confirmed in writing by them.
The declaration appointing the liquidator must be filed within 14 days from its nomination. The shareholders must also make sure the Gibraltar company has duly filed all documents required by the law at the time of the liquidation.
Our Gibraltar company formation experts highlight several important conditions for the Statutory declaration of solvency needed for winding up a company in Gibraltar:
- the declaration is made within 5 weeks after the date the resolution for the appointment of the voluntary liquidation was passed;
- it must include information about the company’s assets and liabilities, calculated at the latest predictable date;
- it is signed by all (or at least the majority) of the company directors; the signing takes place before a notary public, but it can also occur before a commissioner for oaths;
- company directors who submit a declaration of solvency without having reasonable proof that the company is able to pay its debts commit a serious offence.
You can also watch our video on company liquidation in Gibraltar:
The role of the company liquidator
The voluntary liquidator has an important role during the process of company liquidation in Gibraltar. Indeed, voluntary liquidation cannot take place without such an appointed individual.
While the company members and directors retain some of their powers and have certain liabilities while steps are taken to close the company in Gibraltar, the liquidator is the one to handle the essential procedures.
Our team who can also help you open a company in Gibraltar lists the most important actions to be taken by the company liquidator:
- he provides ongoing information to the Registrar concerning the evolution of the liquidation process;
- he files the court orders that arise during the liquidation and observes the strict filing deadlines for the various steps; failure to do so is considered an offence;
- handles the liquidation process in the sense that he gathers and sells the company’s assets (as available), and then makes the necessary payments to the creditors; any remaining amounts he distributes to the shareholders;
- he prepares a statement after the liquidation process is complete;
- he advertises the end of the liquidation stage in the Gazette;
- he calls a general meeting to announce the end of winding up a company in Gibraltar.
The liquidator is the one to file the needed documents with the Registrar. He registers the needed documents so that the Registrar can make the final publishing in the Gazette, the one that announces the end of the process to close a company in Gibraltar
Compulsory liquidation in Gibraltar
Compulsory dissolution of a Gibraltar company can only occur under one of the following circumstances:
- the liquidation was ordered by a court of justice;
- the company is bankrupt and supporting evidence was filed with the Companies Registrar;
- the company had no activity for a year;
- the company does not have the required number of shareholders anymore;
- the company cannot honor its debts.
In the case of compulsory liquidation, a petition is filed with the Gibraltar Supreme Court. In this case, the court will appoint the official receiver to handle the process.
Striking off a company in Gibraltar
Company liquidation in Gibraltar is commonly used when a company is in financial difficulty and it also has debts to creditors. However, the process of striking off a legal entity can be an alternative when the company has no assets and no liabilities.
Investors who set up a company in Gibraltar and decide that the business is no longer profitable can dissolve the company at the discretion of the Registrar. A request for voluntary striking off can be submitted by the company directors.
A company is struck off at the end of a three-month period from the First Notice (the request to remove the company from the Register) if no objections were received during this period.
Company liquidation in Gibraltar, as well as the striking off of a legal entity, are both ways to close a business and may be used in different cases.
Our team can offer complete guidance on liquidation, striking off, as well as the insolvency rules. Seeking specialized assistance during these steps is essential for ensuring legal compliance.
For complete information about company dissolution, do not hesitate to contact our representatives in Gibraltar.