Liquidation is of two kinds; voluntary or by a court decision. According to Federal Law regarding Commercial Companies,
company may be liquidated in the following circumstances:
- If the majority of the shareholders decide to liquidate the company.
- If the company made a cumulated losses which is greater than authorized capital. A court ruling to dissolve and liquidate the company.
If the liquidation is upon a court decree, then the court shall appoint a liquidator and define the method of liquidation. In voluntary liquidation, the shareholders or the general assembly shall appoint a liquidator.
The aforesaid law states that, for the liquidation of the company, provisions of Articles hereunder shall be complied with, unless a method for liquidation is provided for in the company memorandum or articles of association or an agreement between the partners is reached upon dissolution.
Liquidation shall be carried out by one or more liquidator(s) appointed by the partners or by the general assembly with the simple majority whereby the company resolutions are being issued. If liquidation is initiated under a court decree, the court shall define the method of liquidation and appoint the liquidator. In all cases, functions of liquidator shall not end as a result of death of the partners or their bankruptcy, insolence or sequestration, even if he was appointed thereby.