Dissolution of companies

Question 1

If asked about the dissolution of companies how would you answer?

Answer 1

Introduction:
[The meaning of company dissolution]
body:
[causes and consequences of company dissolution]

Conclusion:
[A very short summary of the above]

Question 2

What is the dissolution of a company?

Answer 2

The dissolution of a company is the legal process by which a company comes to the end of its existence, it marks the end of the relationship between the shareholders or partners of that company.

Question 3

What can cause the dissolution of a company?

Answer 3

The OHADA Uniform Act of Commercial Companies and Economic Interest Groups, in section 200 provides 5 scenarios in which a company would have to be dissolved, which include:

-> A company’s lifespan may come to an end if the contract forming the company is annulled
-> Shareholders can agree to dissolve the company under conditions in the article articles of association, making the end of the company
-> The dissolution of a company may be requested by the court or shareholders for justified reasons
-> If the duration specified during the company’s creation or the maximum duration of a company provided by law which is 99 years is reached, the company must come to an end
-> If the objective for which the company was formed is achieved the company must come to an end

Acronym: CARLO

Contract
Aggreement
Request
Lifeshpan
Objective

Question 4

What are the effects of a company’s dissolution?

Answer 4

The aftermath of a company dissolution in the majority of the cases involves the assets of the company being sold and the money obtained used to settle the debts of the company, while whatever balance is left from it is distributed among shareholders based on their shares. This however is a multi-step process:
-> First the company has to stop doing business, at this time it still retains its legal personality, it only loses it at the end of the process
-> Next the company shall be stroke off the TPPCR, and the name of the company shall be removed from the list of registered companies
-> Lastly a liquidator shall be appointed to liquidate the company’s asserts