Company liquidation in Mauritius falls under the Insolvency Act after the government gathered various laws to provide a clear procedure for those seeking to close their businesses. There are several proceedings for winding up a company in this country.
Below, our company formation agents in Mauritius explain how you can close a company in this country through the 3 available procedures.
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The 3 ways to wind up a company in Mauritius
The main ways to close a company in Mauritius cover 2 voluntary and judicial procedures, as presented below:
- members’ voluntary procedures;
- creditors’ voluntary proceedings;
- compulsory procedures.
Each of them is subject to specific criteria to be met when the decision is made.
According to the law, company liquidation in Mauritius implies winding up the assets of the entity in order to pay the debtors. Following that, any remaining proceeds will be distributed among the shareholders.
Members’ voluntary company liquidation in Mauritius
Winding up a company when the decision is made by the shareholders is known as a members’ voluntary liquidation. In this case, the procedure requires the owners to convene a meeting during which the decision to close the Mauritius company is made and the liquidator is appointed.
The liquidator can be chosen among the directors and from that point, the respective person will be in charge of activities of the company. The first and most important duty will be to notify the Companies Register, creditors, employees, and other interested parties about the liquidation.
If you need advice on this type of company liquidation procedure, our lawyers in Mauritius are at your disposal.
Creditors’ voluntary winding up
Another scenario is when the company is insolvent, and the creditors meet to decide to ask for the company to be closed. The decision is made by creditors in this case, with the approval of the shareholders.
The creditors will appoint the liquidator who will take control of the company and its assets. In this scenario, the following things must also be considered:
- the directors will keep their positions, however, they will have no decision or executive powers in the company, with the exception of those covered by the Companies Act;
- the shareholders will also cease to exercise their powers, with the exception of those provided by the Companies Law and the Articles of Association.
If you need any information about the provisions of the Commercial Code, our company registration consultants in Mauritius can advise you.
How to close a company in Mauritius by court order
Compulsory company liquidation in Mauritius will also commence at the request of the creditors. However, in this case, the procedure begins after the petition is filed with a local court of law, and the judge is the one declaring the initiation of the winding up proceedings. It is also the judge who appoints the liquidator in this case.
Deletion from the Trade Register
No matter the way a company is liquidated, it ceases to exist after a petition for its deletion from the Companies Register’s records is filed. The request will be filed by the liquidator.
Record number of companies closed in the pandemic
Mauritius’ economy is currently striving, however, during the COVID pandemic, a large number of companies downsized or closed. According to the government:
- 40 small and medium-sized enterprises (SMEs) closed at the time;
- another 22% of all SMEs released at least one employee;
- a total of 10,000 employees lost their jobs due to companies closing or downsizing.
If you need more information on liquidation, you can rely on our lawyers. They are also at your disposal with other services, among which immigration and obtaining citizenship to Mauritius, applying for a Mauritius Forex license, or opening a bank account in Mauritius.
Contact us and find out more about our company liquidation solutions and other legal services. Among them, we remind you that we can also help with business registration in Mauritius.
