Liquidation for a legal entity

How liquidation works

1. Appoint the liquidators

   Liquidation is done by 1 or more liquidators. Usually, these are the directors of the business. Sometimes the articles of association or the dissolution decision will specify that someone else is to be appointed to this role. The liquidators are responsible for settling the company’s assets and debts. The directors almost always step down once the liquidators have been appointed.

2. Make an overview of assets and debts

   The liquidators list all assets and debts and sell things to pay off debts. They make a document recording these details. This is called the ‘statement of accounts’.

   Is there any money or property left over after the debts have been paid? If so, there is a surplus. Are 2 or more people entitled to this money or these assets? Such as members or shareholders of the legal entity. If so, the liquidators draw up a ‘distribution plan’. This plan sets out how the money and assets are to be distributed. 

   Can the debts not be paid?  

   If the liquidators cannot pay the debts using the legal entity’s funds, there are 2 options:

   • The liquidators reach an agreement with all creditors regarding the payment of the debts, without filing for bankruptcy. The liquidation and dissolution of the legal entity can proceed as described above.
   • If such an agreement cannot be reached, the liquidators must apply to a court for the legal entity to be declared bankrupt. The judge will assess whether the debts can still be paid. If not, the judge will appoint a trustee (called a curator in Dutch). The trustee will handle the further proceedings.
3. Send documents to KVK by post

   The liquidators must send a copy of the statement of accounts to 1 of KVK’s postal addresses. If more than 1 person is entitled to the surplus, the liquidators must also include the distribution plan. The liquidators must also file a copy of these documents at the registered office of the legal entity.

4. Place a notice in a newspaper

   The liquidators place a notice in a newspaper. The notice states where and until when people can view the documents. Any parties or creditors who disagree with the accounts or distribution plan can apply to the court within 2 months of the notice being placed. This is called filing an objection (verzet indienen in Dutch).  

   • If anyone files an objection to the distribution plan, the liquidators will announce this objection in the same way as was previously done with the statement of accounts and distribution plan. As soon as the objection is withdrawn or a final decision is made, the liquidators will again announce it in the same way. Does the decision result in an amendment to the distribution plan? Then they also announce the amended plan in this way.
   • Are there no objections filed? Then the liquidators may implement the distribution plan after 2 months.

   Choose the newspaper for your notice with care

   Place the notice in a national newspaper. Is your business mainly active at a regional level? If so, choose a regional newspaper. That way, you will reach the people who might be interested in viewing the documents.

5. Deregister the legal entity from KVK

   Liquidation ends at the time when there are no more assets known to the liquidators. The liquidators must report the end of the legal entity to KVK. You can find out how to do this on the page Dissolving a legal entity.