LIQUIDATION TYPES

Understanding Company Liquidation in Luxembourg

 

Voluntary dissolution (Liquidation volontaire)

Initiated by shareholders when a company has achieved its objectives or is no longer profitable.

 

Judicial Liquidation (Liquidation Judiciaire)

Ordered by the court when a company is insolvent and unable to meet its obligations. This procedure is often initiated by creditors or the public prosecutor to protect the interests of stakeholders.

 

Bankruptcy (Faillite)

A form of judicial liquidation triggered when the company is declared bankrupt. It includes court supervision, the appointment of a receiver, and asset liquidation to satisfy creditors.

 

Simplified Liquidation

A faster procedure available for small companies meeting certain conditions (e.g., no employees, no pending litigation, limited number of creditors). This process reduces administrative steps and costs.

 

Three-Stage Liquidation Process

In Luxembourg, liquidation is often described in three phases: Dissolution decision – Shareholders resolve to dissolve the company. Liquidation phase – Settlement of debts, sale of assets, and preparation of final accounts. Closure (radiation) – Removal from the Luxembourg Business Register (RCS).

 

Accounts of Liquidation

Special Situations: Funds, Banks, and Cross-Border Groups