Fast-track liquidation

Ending your company without assets? Pay attention to the rules

Do you want to end your business, but there are no assets left? Then you can make use of an expedited dissolution procedure: the turbo liquidation. In this case, a shareholders' resolution is sufficient to dissolve the legal entity, without the intervention of a curator or court.

What is a turbo liquidation?

In a turbo liquidation, a legal entity is dissolved without liquidation of the assets, because there are no remaining benefits. This makes it a simple and quick way to legally end a business and thus have it removed from the Commercial Register of the Chamber of Commerce. However: turbo liquidation is only allowed if there are truly no assets left.

Creditors will be left with unpaid claims under this route. To prevent abuse, since the introduction of the Temporary Transparency Act for turbo liquidation, there are additional obligations for directors.

New obligations for the board

Based on the temporary law, the board of the dissolved legal entity must:

• Provide financial accountability, including a balance sheet, income and expenditure statement, and an explanation of the dissolution;
• Clarify whether and how creditors have been satisfied;
• Actively inform creditors about the dissolution and the absence of assets.

If these obligations are not met, the director may be held personally liable or face a prohibition on management.

Prevent risks, handle it properly

A poorly executed turbo liquidation can lead to liability, legal proceedings, and damages. Therefore, make sure to get good advice when preparing and executing the termination of your business.

Are you considering a turbo liquidation? Contact our specialists for legal advice and guidance for a careful settlement.