From a perspective of corporate law, the liquidation/winding up of a company is the beginning of the period after its dissolution, i.e. when the assets of the company are wound up. During the phase of liquidation, in Germany, the company name bears the suffix “i.L.” for “in liquidation”.

Liquidation only takes place when a well-to-do company is to be dissolved, or an insolvency petition was not rejected due to a lack of assets. If a company is insolvent, the liquidation process is governed by the Insolvency Code.

The liquidation/winding up is usually performed by the managing director or a board member (liquidator), whose job it is to generate as large as possible an estate for distribution in the interest of the creditors and the partners or shareholders. The liquidator is a body of the company and in this function, has liability according to the general rules.

The purpose of the liquidation/winding up is to terminate the current business, and after settling all liabilities, to distribute the remaining monetary assets to the partners/shareholders. The liquidation/winding up also includes the sale of the entire company, or of its operational parts. All business that serves the liquidation/winding up may be transacted, and even new contracts can be entered if necessary.

After the distribution of the proceeds of the liquidation to the shareholders/partners and the drawing up of the final accounts, the liquidators need to report the termination of the liquidation to the commercial register. The company has thus been wound up, and, upon review by the registration court, it is deleted from the commercial register. Thus the company ceases to exist.

Are you going to be appointed as a liquidator, or do you have general questions about liquidation?

The liquidation/winding up of a company does not only entail a liability risk for the liquidator, but also strategic risks, which, without legal advice, may result in incorrect decisions.

We consider it our job to accompany you in the liquidation/winding up of your company and to provide you comprehensive advice.