Judicial liquidation: how it works

Judicial liquidation is ordered when a company is in cessation of payments and recovery is manifestly impossible. It ends the business, sells the assets and distributes the proceeds among the creditors.

When is a company liquidated?

Two cumulative conditions: cessation of payments and recovery that is manifestly impossible. Liquidation can be ordered straight away or after a failed receivership.

Step by step

Liquidation judgment: the court appoints a liquidator and may authorise a temporary continuation of business (up to 3 months, renewable).
BODACC publication: starts the two-month window to file claims.
Realising the assets: the liquidator sells the property (as a whole or piecemeal) and collects the company’s receivables.
Verifying and settling liabilities: filed claims are verified, then paid by order of priority within the available funds.
Closure: for extinction of liabilities (rare) or, most often, for insufficiency of assets.

Simplified liquidation

For very small businesses (turnover, asset and headcount thresholds) a faster simplified procedure applies, usually closed within 6 to 12 months.

What are the consequences?

Employment contracts end (the AGS scheme guarantees wages), the director is divested in favour of the liquidator, and unpaid creditors generally only recover a right to sue in limited cases (fraud, personal bankruptcy).

Frequently asked questions

How long does judicial liquidation last?

From a few months (simplified procedure) to several years depending on how complex the asset sale and litigation are.

What happens to debts after closure for insufficiency of assets?

Creditors generally do not recover an individual right to sue the debtor, save for exceptions (fraud, guarantee, personal bankruptcy).

How do I know if a company is in liquidation?

The judgment is published in the BODACC and shown on the Kbis extract. Solvenda monitors the BODACC by SIREN and alerts you.

Solvenda watches for you, every morning.

Solvenda monitors the BODACC by SIREN across your whole client portfolio and counts down the two-month claim deadline.

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