General

How does a turbo-liquidation procedure work?

By 7 September, 2018November 1st, 2024No Comments

Turbo-liquidation is a fast-track procedure designed to save time and bypass the winding-up phase of liquidation. It is only applicable in cases where there are no positive assets remaining in the company. Since the balance sheet is empty, there are no assets to liquidate, no fees to collect, and no debts to pay. For this reason, no liquidators need to be appointed.

The management board must file the liquidation of the company with the trade register, and the company’s books and records will be stored with a custodian for a period of seven years.

In short, the advantages of turbo-liquidation include the time and money saved by forgoing several steps required in the traditional procedure. However, the following documents must be filed at the registers where the legal entity is registered within 14 days after dissolution:

– A balance sheet and an income statement for the fiscal year in which the legal entity was dissolved, as well as for the previous year if the financial statements for that year have not yet been publicly disclosed at the time of dissolution.

– A description of the cause for the absence of assets, if applicable, detailing how the assets of the legal entity wererealized and how the proceeds were distributed, along with the reasons why creditors were not paid, if applicable.

– The annual accounts for the financial years preceding the financial year in which the legal entity was dissolved, if there is a legal obligation to do so which has not yet been fulfilled, including the auditor’s report, where appropriate.

Additionally, creditors must be informed immediately after the dissolution. If this is not done properly, there can be serious consequences. It is crucial to emphasize that absolutely no assets can remain on the balance sheet for this streamlined procedure to work. If this requirement is not met, the company is considered never to have been dissolved.

Services provided by KC Legal

  • Preparation and filing of the liquidation of the company with the trade register of the Chamber  of  commerce.
  • Preparation of final financial statements.
  • All registrations with the Dutch trade register of the Chamber of Commerce.
  • Acting as custodian.
  • Preparing and filing the final corporate income tax returns.
  • Drafting shareholders resolution for the turbo liquidation procedure.