The length of time it takes to complete a compulsory liquidation can vary depending on the complexity of the case and the size of the company. However, it typically takes several months to complete the process.
Here is a general timeline of the compulsory liquidation process:
1. Petition for compulsory liquidation:
A creditor, shareholder, or government agency initiates the process by petitioning the court for a compulsory liquidation order. The court will review the petition and decide whether to grant the order.
2. Appointment of a liquidator:
Once the court grants the compulsory liquidation order, a liquidator will be appointed to manage the process. The liquidator will take control of the company’s assets and begin the process of selling them to pay off the company’s debts.
3. Investigation and reporting:
The liquidator will investigate the company’s affairs to determine the extent of its debts and liabilities. The liquidator will also prepare a report on the company’s financial position and the reasons for its failure.
4. Realisation of assets:
The liquidator will sell the company’s assets, which may take several weeks or months depending on the complexity of the assets and market conditions.
4. Distribution of proceeds:
Once the assets have been sold, the liquidator will use the proceeds to pay off the company’s creditors in accordance with their legal entitlements.
5. Closure of the liquidation:
Once the liquidator has completed the process of selling the assets and paying off the creditors, the liquidator will apply to the court to close the liquidation.
The length of time it takes to complete each stage of the compulsory liquidation process can vary depending on the specific circumstances of the case. However, the entire process usually takes around three months, but in some cases, it can take up to a year or more.