Liquidation of Companies in Nepal | Closing a Company in Nepal

Liquidation of Companies in Nepal | Closing a Company in Nepal | Law of Company and Insolvency | Liquidation of Company | Dissolution of Company in Nepal | कम्पनी खारेजी | Company Closing in Nepal | How can I liquidate my company? | How do I close the company in Nepal? | Documents required for liquidation of company |Voluntary liquidation of company | Process of liquidation of company

Liquidation is the formal process of bringing a business to an end and distributing its assets to claimants such as creditors and shareholders. It is most commonly initiated when a company becomes insolvent, unable to pay debts, or faces financial hardship.
This video describes about the detailed information, conditions and process relating to the liquidation of companies in Nepal.

For More Details:
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Relevant Link:
https://www.lawimperial.com/liquidati...

Governing laws:
1. The Insolvency Act, 2006,
2. The Companies Act, 2006, and
3. The Bank and Financial Institutions Act, 2017 for banks and financial institutions.

Timestamp
0:00 Liquidation Introduction
0:30 Governing Laws
0:47 Methods of Liquidation
0:58 Voluntary Liquidation
1:21 Conditions of voluntary liquidation
1:42 Procedure of voluntary liquidation
3:36 Compulsory Liquidation
3:55 Conditions of Compulsory Liquidation
4:21 Procedure of Compulsory liquidation
7:19 Deregistration of Company in Nepal

Methods of liquidation:
In Nepal, there are two types of liquidation:
a) Voluntary Liquidation; and
b) Compulsory or Forced Liquidation.

A. Voluntary Liquidation:
A voluntary liquidation is a self-imposed wind-up and dissolution of a company that has been approved by its shareholders. Voluntary liquidation is done when company is able to pay its debts fully and a situation where a company can satisfy the claims of all its creditors.

Conditions of voluntary liquidation:
• The company is able to pay its debts or other liabilities fully;
• Shareholders must make a written declaration regarding payments of liabilities in full;
• Shareholders must pass a resolution to liquidate the company.

B. Compulsory Liquidation:
Compulsory liquidation is a situation in which a company must stop operating and sell all its assets in order to pay its debts. Compulsory or forced liquidation is done if any company is not able to satisfy claims of all the creditors.

Conditions of Compulsory Liquidation:
This process begins with a court order, which is usually initiated by:
• The company itself,
• At least 10% of its creditors,
• Shareholders owning 5% of shares,
• Debenture owning 5% of debentures,
• A government body or authorized body overseeing specific industries and businesses.

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