C A Mather Incorporated
Liquidation

A Company and a Close Corporation ( CC) are by law regarded as people or persons. ( In legal jargon - legal persona ). They cannot walk, talk, read, write or think and therefore have to be represented by real people.( natural persona ). A Company is represented by directors / shareholders, and a CC is represented by its members. (representatives)

A natural persona may be sequestrated, and a legal persona, liquidated. The grounds for liquidation, as opposed to sequestration, may be  different.Your attorney will explain.

A legal persona may be liquidated because :-
1.  It is unable to pay it's debts.
2.  It's liabilities exceed it's assets.
3.  It's representatives are squabbling and as a result, it cannot function.
( It's brains are addled ).

Liquidation effectively closes the persona. If it's representatives have signed leases, surityships, or assumed any other personal liability for the persona's debts, they are at risk. The liquidation of the persona could result in their sequestration.

Usually, liquidation takes place by way of an application to court. If a Company is involved, the application is made to the High Court. An application to liquidate a CC may be made to either the High or Magistrates Court. The application may be made by a representative or a creditor.

Once a liquidation order has been made by the court, a liquidator is appointed by the Master of the High Court. The liquidator then takes control of the persona.

If the representatives have personal assets of some worth and they have incurred personal liability, the threat of liquidation can be very effective means of debt collection. Discuss this with your attorney.