Methodology of companies’ liquidation under the Tunisian law

A company may be liquidated:

–         As a « private » liquidation, governed by the Commercial Companies Code (arts. 28-53). The liquidation decision may be taken by the extraordinary shareholders’ meeting or by the competent court ;

–         As an insolvency procedure, under the rules of Articles 413 et seq. of the Commercial Code as amended by Law No. 36 of 2016, dated 29 April 2016, relating to insolvency. In this case, it is the result of the complete failure of the company, and the main condition is that the court believes that there is no future for the company, whatever the sacrifices and efforts are for its shareholders, directors, emplyees, and creditors are.

In light of the decision to liquidate the company, which is an alternative to bankruptcy or the the judicial settlement procedure([1]), it is the appointed liquidator (generally a chartered accountant) who will have the following tasks:

– Publish the decision to liquidate and inform the president of the competent court who will proceed to the appointment of a supervising judge;

– Identify and claim the property of the company and establish a statement of assets, including property rights and claims of the company on third parties (natural or legal persons). This task also entails the obligation to bring liability claims or otherwise, including actions for the liability of corporate officers who have committed management misconduct that has caused the liquidation of the company, including misappropriation of corporate assets. The liquidator must have relevant and sufficient information to that effect, which may be provided by the partners or the auditor. This operation may take too much time, that exceeds the maximum duration of the liquidation set by article 40 of the Commercial Companies Code ;

– Identify the debts of the company;

– Sell the compmany’s assets following a transparent procedure, excluding the liquidator himself for reasons related to prevention of conflict of interests ;

– Use the assets (liquidated in case of need, if it is not cash) for the payment of the company’s debts, in accordance with the order of precedence of the creditors. In general, employees enjoy a super-privilege that entitles them to be paid before any other creditor, including the tax administration, and other public bodies (CNSS, ONAS, STEG, SONEDE …), and banks having a mortgage or pledge, as well as creditors exercising retention right. The liquidator’s fees are also among the preferential claims. They are fixed by the company’s general meeting, under the control of the judge;

– Distribute the liquidation bonus, if any, to the shareholders in proportion to their shareholdings in the share capital ;

– submit the final accounts of the liquidation to the approval of the shareholers’ meeting ;

– Inform the public of the closure of the liquidation when all those tasks are accomplished.

Ahmed Ouerfelli

Ouerfelli Attoreneys & Counsels