The Liquidation Process

Liquidating a company in South Africa involves a number of important steps to ensure a proper and legal dissolution. Below is a high‑level overview of how the process typically unfolds.

Key Steps in the Liquidation Process

1. Resolution to Liquidate – Directors or shareholders evaluate the company’s financial position and pass a special resolution to wind up the business.
2. Application to Court for Provisional Liquidation – A court application is lodged for a provisional liquidation order. In a compulsory liquidation, this application may be brought by creditors.
3. Provisional Liquidator Appointed by the Master – After the court grants a provisional liquidation order, the Master of the High Court appoints a provisional liquidator to safeguard the company’s estate.
4. Filing the CM100 & Notifying Creditors – The directors and company secretary prepare a Statement of Affairs (Form CM100) detailing the company’s liabilities and assets and submit it to the Master. The provisional liquidator notifies all known creditors and issues claim forms.
5. Final Liquidation Order Granted by the Court – On the return day of the provisional order, the court considers any objections and, if appropriate, grants a final liquidation order.
6. Meetings of Creditors – The Master convenes a first meeting for creditors to prove their claims and nominate a final liquidator. A second meeting is later convened by the final liquidator to present the liquidation report and adopt resolutions.
7. Sale of Assets and Distribution of Funds – The liquidator realises the company’s assets, prepares a liquidation and distribution account, and lodges it with the Master. After inspection and confirmation, payments are made to creditors according to their ranking.
8. Final Account and Dissolution – Once all obligations are settled and the final account is confirmed, the Master issues a certificate of dissolution and the company is deregistered with the Companies and Intellectual Property Commission (CIPC).

Filing the Statement of Affairs (CM100)

At the start of the liquidation, the directors and company secretary must complete a CM100 form (Statement of Affairs) in terms of section 363 of the Companies Act 1973. This document lists the company’s creditors and liabilities, secured and unsecured debts, assets and shares. It must be affirmed by the directors and secretary and submitted to the Master of the High Court. The CM100 assists the liquidator and creditors by providing a comprehensive overview of the company’s financial position.

Liquidation Process Flow