Company Liquidation in Germany

Legislation related to company liquidation in Germany

Company liquidation in Germany falls under the German Commercial Law and the Civil Procedure Code. However, due to that fact that investors can set up different types of companies in Germany, limited liability companies and stock corporations will also fall under the Limited Companies Act and the Stock Corporation Act. Additionally, the Industrial Code and the Commercial Register regulations also contain provisions about the liquidation procedure. 

The German legislation establishes two ways of liquidating a company:

• - voluntary liquidation,
• - compulsory liquidation.

Our specialits in company formation in Germany will provide you all the relevant information about the liquidation procedures. Furthermore, our consultants can also help businessmen interested in setting up a company in Germany, as we have an experienced team in both company registration and company liquidation cases. 

Voluntary company liquidation in Germany

A German company’s shareholders may choose a voluntary liquidation if there are no ways for the business to be salvaged. In order to do so, the shareholders are required to pass a resolution for company liquidation. The resolution will pass if 8/4 of the votes are in favor of the liquidation. Voluntary liquidation may also happen under circumstances provided by the company’s Articles of Association. The first step of the company liquidation procedure is to prepare a balance sheet which will contain information about the liquidator. The liquidator will be in charge with the administration of the German company throughout the procedure. In German liquidation procedures, the liquidator may be the company’s manager, only in this situation his or her main role will be to pay the company’s debts.

Once the liquidator has been appointed, the company must notify the German Commercial Register. Following the notification, the liquidation decision will be published in the Official Gazette. The creditors will also be informed about the beginning of the company liquidation procedure. The voluntary liquidation of a German company will take at least one year.

Compulsory liquidation in Germany

The compulsory liquidation of a German company is the same as voluntary liquidation with the exception a Court will rule in favor of the procedure. Compulsory liquidation usually comes after the company is declared insolvent. In case of compulsory liquidation, a judge will appoint the liquidator. The Court will also be in charge with publishing the insolvency decision in the Official Gazette.

No matter the type of liquidation a German company undergoes, it must de-register with all the relevant authorities.

For complete information about liquidation procedures you may contact our consultants in company formation in Germany who can also can help with information related to legal procedures in other countries, such as Iran. In case you need assistance in setting up a company in Germany, our team is also ready to assist you.