It is important to understand the steps on how to liquidate a company in Belize if you are considering exiting the market. As a small country in Central America experiencing positive, but slow, economic growth, companies may make the decision to close down operations.
The liquidation process of a company in Belize is complex and undertaking the full and correct process can take time. There are various important steps and legal obligations you need to undertake to fully comply with the law along the way. You’ll need to engage with a local legal expert in Belize for assistance with this process.
Find out what steps you’ll need to take to liquidate your company in Belize.
Overview of company liquidation in Belize
Liquidation is the process of finishing operations and closing a business. The process includes distributing its assets to claimants. It is an occasion that normally happens when an organization is insolvent, which means it can’t pay its obligations when they are expected to.
As a company’s operations end through liquidation, its remaining assets are utilized to pay creditors and shareholders. If the company does not have outstanding debts, then in theory the process should be faster. However, it is important to review the accounting documents (financial statements, balance sheets, annual statements) to fully understand the company’s financial situation.
Steps to liquidate your company in Belize
According to current legislation in Belize, the liquidation procedure can be initiated in two ways:
- Voluntary liquidation
- Liquidation by judicial decision
Voluntary company liquidation in Belize
In the case that the company is experiencing losses or completes its intended objective, it may choose to voluntarily close down. The company may no longer serve a purpose, or its continued operations could accumulate debt that it could not pay.
To initiate voluntary liquidation, shareholders must agree in an extraordinary meeting to liquidate the company in Belize. The following documents are required in order to proceed with the voluntary liquidation:
- Resolution, which indicates the fact of the decision to terminate the activities of the company.
- Appointment of the liquidator of the company.
- Certificate with clearly indicated stages of liquidation of the enterprise (liquidation plan).
- Regulation on the termination of the company. This document also necessarily includes information confirming the fact that there are no debts of the company and the fulfillment of all necessary obligations.
The documents mentioned above should be presented to the register of business facilities in Belize. After the exchange of the documents, the declaration of the liquidation of the business is published (which should be shared with several local media) When all these procedures have been executed, the business is officially liquidated.
Steps to voluntarily liquidate the company
Normally, the liquidation process of a company should not take more than 2 months. The steps to formally liquidate a company in Belize include:
- Submit a Resolution approved by the shareholder’s meeting to start the liquidation process.
- Appoint the Liquidator.
- Submit a new resolution starting the liquidation process.
- Notice and realize meeting with the creditors and/or debtors of the company in liquidation.
- Identify and distribute the assets between the shareholders of the company.
- The liquidator most prepare a final resolution detailing the work he have done during the liquidation process.
- The liquidator will register in the International Business company registry a statement establishing that the dissolution and liquidation process is complete.
After all processes are completed, you’ll get a certificate of dissolution.
Liquidation by judicial decision
In Belize, companies must regularly renew their operating licenses to do business in the country. The Belizean state can liquidate the organization if the business is unable to pay for the re-establishment of its operating license one year after its expiration date.
If the company chooses not to, or is unable to, renew its license and continue operations, it will be erased from the business register by the administrative experts in Belize. This liquidation procedure will only be performed after the end of the calendar year.
Common FAQs for Liquidating an entity in Belize
Based on our extensive experience these are the common questions and doubts of our clients when liquidating a local entity
Directors’ Resolution: The company’s directors pass a resolution to initiate the liquidation process.
Appointment of Liquidator: A liquidator is appointed to oversee the liquidation process. The appointment can be made by the directors or the court.
Notice to Creditors and Registrar of Companies: Formal notice of the liquidation is sent to creditors, and the Registrar of Companies is notified.
Asset Liquidation and Debt Settlement: The company proceeds to liquidate its assets and settle its debts, ensuring proper distribution of funds to creditors.
Employee Settlement: Settlement of employee obligations, including payment of wages, entitlements, and termination benefits in accordance with employment laws.
Meeting of Creditors: A meeting of creditors may be held, allowing creditors to appoint a committee of inspection and approve the appointment of the liquidator.
Account Closure and Tax Compliance: Closure of the company’s accounts and fulfillment of tax obligations, including the submission of final tax returns.
The liquidation process will normally take between (6) and (12) months, assuming the entity is in good standing and no rectification work is required.
Liquidate your company in Belize with help from Biz Latin Hub’s local experts
Executives operating in Belize may make the decision to close their company through liquidation based on a number of factors. The liquidation process in Belize can be complex, and requires a sound understanding of the local legal framework. Therefore, it is important to seek expert guidance and support when undertaking this procedure.
At Biz Latin Hub, our team of local and expatriate legal professionals in Belize can support your liquidation proceedings and operate in full compliance with local law. We work to ensure the best outcomes for you and your business. Our experienced legal team in Belize can provide guidance during the liquidation process and help with entry and exit of the market.
Contact us now for personalized advice.
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