In what circumstances can a company be voluntarily liquidated?

In what circumstances can a company be voluntarily liquidated?

A company's voluntary liquidation is divided into two: one is the liquidation by the company members and the other the liquidation made by the company's creditors. The conditions in which the Company may be liquidated voluntarily are set out in Chapter 113. Accordingly:

If the period of operation of the company is determined, the company may voluntarily liquidate the company or the company may be voluntarily liquidated if it is determined by the statute that the company will terminate its activities upon occurrence of an incident;

The shareholders of the Company may decide on the liquidation of the company with a special decision;

The Company may apply for voluntary liquidation by an extraordinary decision of the shareholders due to its inability to meet its obligations.

Upon voluntary liquidation decision of the company, the company is obliged to notify its members by publishing the decision in the official gazette within 14 days from the date of the decision. The company shall terminate its activities from the date of voluntary liquidation decision but may continue its activities to contribute to the liquidation procedures. In addition, until the liquidation process is completed, the company's statutory articles and statutes and the registered legal entity status continue.

What is the voluntary liquidation of creditors?

When a meeting has been arranged by the members of the company in order to propose the liquidation of the company, its date shall be notified to the creditors who shall hold a meeting on the same day or the next day. The Company Director shall submit the activities of the company, the list of its creditors, the company’s financial liabilities, and a declaration showing the status of the company's business to the creditors. The meeting carried out by the creditors is then published in the official gazette by the company.

Appointment of liquidator in voluntary liquidation by creditors

Company members and creditors can determine the liquidator with separate meetings. If it is decided to appoint a different person as a liquidator in the two meetings, the person designated by the creditors becomes the liquidator. In other words, the liquidator appointed by the creditors has priority. If the creditors do not appoint one, the person designated by the company becomes the liquidator. However, within 7 days from the date on which creditors appoint the liquidator, the members of the company may apply to the Court to request appointment of one of his/her appointees together with the liquidator appointed by the creditors.

What does liquidation depending on the Court's supervision mean?

This form of liquidation is a kind of voluntary liquidation. However, the Court orders the voluntary liquidation to be subject to its own conditions and restrictions. Although there is already a designated liquidator, the Court may appoint an additional person and authorise him/her, and may dismiss the liquidator at any time. The liquidator can use all powers given to him by this law, subject to the conditions and restrictions imposed by the Court.

  • Gürkan&Gürkan
  • July 2019