Ask the law: Partners seek closure for limited liability company
Company grapples with closure due to absent partner
Question:
We are 4 partners in a private limited liability company. A year ago, one of the partners left the country and we do not know his address. Currently the company is experiencing losses and we all agreed to close the company, but we were not able to due to the absence of the fourth partner. My question is: What is the appropriate procedure to take to close the company in the absence of the fourth partner? Please advise.
Answer:
To answer such question, I would advise the questioner that:
The partners holding one quarter of the capital may request the court to dissolve the company if the losses of a Limited Liability Company reach three quarters According to Article 308 of the Companies Law no. 32/2021,
The partners holding the same majority prescribed for amending the Memorandum of Association may decide to dissolve the company through a decision made by the general assembly if the losses reach half of the capital. In this case, the managers shall refer the dissolution matter to the general assembly of the partners.
The partners may decide to liquidate the company and nominate the liquidator through a decision made by the general assembly following the methods of liquidation agreed upon in the Memorandum of Association or Statute of the Company. If such a method is not provided, then the provisions of the companies Decree-Law shall apply to the liquidation of the Company.
Article 678 of Civil Transaction law gave the right to any person having an interest to apply to the court to liquidate the company. It states: “The assets of a company shall be liquidated and distributed in such manner as the partners agree, and if they do not agree, it shall be permissible for any person having an interest to apply to the court for an order appointing one or more liquidators to carry out the liquidation and distribution”.