Company Law Amendment

Liquidation of Company in Bangladesh

Liquidation is the process by which a company is brought to an end, and the assets and property of the company are redistributed. 

Advantages:

1. Liquidation is defined in the law and it is a very easy process. 
2. In case of liquidation, shareholders and stakeholders get their interests back quickly. 
3. The court appoints a liquidator and that liquidator takes over all the responsibilities, liabilities of the company. Hence, no more responsibilities for directors. 
4. As in liquidation the court itself will oversee the whole process, there is less chance of corruption.
5. In liquidation, the company loses its identity. Thus no tax liabilities. 

Disadvantages:

1. Liquidating company loses its identity completely. 
2. In liquidation the company with the loss of its identity loses all its goodwill, intellectual properties, licenses, bonds.
3.  On the appointment of liquidator, other related companies cannot get/buy assets of liquidating company. 
4. The liquidating company no longer has the power to dispose of its property.
5. In case of liquidation the liquidating company may get lower value than expected for assets. 
6. The powers of the company directors come to an end when a liquidator is appointed.

Procedure:

The first step for liquidation is to file a petition for winding up under section 234 of the Companies Act. After that the court may fix a liquidator. On the making of a winding up order, the petitioner will file the order in the Office of the Registrar of the Joint Stock Companies and Firms. After that the company being wound up is to file the statement of all of its assets, debts and liabilities, creditor details and debts due to the company, which will be verified then. On receiving the statements the liquidator will submit to the court within 160 days of the order a report. Then the liquidator will take the custody of all assets of the liquidating company.