The procedures for placing a company in liquidation are outlined in the Company Law. A company is legally classified as ‘in liquidation’ if one of the following conditions has been satisfied:
- Shareholders’ meeting resolution.
- By court order, if the company is bankrupt, no shareholder can be located, other legal grounds.
The Bankruptcy Law sets out the basic procedures for declaring companies bankrupt, as well as for their dissolution and to protect the interests of their creditors. However, the same provisions are covered in the Company Law, where Civil Code provisions are also mentioned. Problems include the lack of provision whereby a company can restructure with the agreement of its creditors in order to avoid bankruptcy. In the case of many state-owned enterprises, these enterprises are technically bankrupt but continue to trade.
