Liquidation

When it has done what it was set up to do and is no longer needed: the final investment has been sold, the financing has been repaid, the investment period or fund life has ended, or the vehicle has simply been superseded. Leaving an inactive entity in place keeps generating accounting, tax, governance and filing obligations, and the cost of maintaining it usually exceeds the cost of closing it.

No. The route depends on legal form, shareholder structure, solvency and any specific statutory regime applicable to the entity. Some companies can be closed by a dissolution without liquidation; others require a formal liquidation with an appointed liquidator.

In a conventional liquidation, a liquidator is appointed to realise the assets, settle the liabilities and distribute the surplus before the entity is closed. Where all shares are held by a single shareholder and the applicable legal conditions are met, Luxembourg law can allow a dissolution without liquidation, in which the sole shareholder takes on the assets and liabilities and the entity is closed in a single step. The second route is faster, and correspondingly less forgiving of unidentified liabilities.

A clean solvent liquidation of an SPV with no remaining assets, no open claims and settled tax affairs can typically be completed in a few months. Fund structures and entities with residual assets, outstanding receivables, open contracts, unresolved tax positions or claims commonly run twelve to twenty-four months, and sometimes longer. The realistic determinants are the last assets and the ability to dispose of it — not the corporate formalities.

Takes responsibility for the wind-down: identifying and realising assets, collecting receivables, settling liabilities, terminating contracts, handling tax and administrative matters, preparing the liquidation accounts and reports, and organising the final distributions.

Yes, but only where the remaining liabilities have been properly provided for. Creditors must be protected, and known or reasonably foreseeable liabilities must be paid, reserved or otherwise dealt with before surplus assets go to shareholders. Interim distributions during a liquidation are common in practice and require a documented solvency and liability analysis at the time they are made.

Yes, where the legal form, constitutional documents and the rights of the relevant shareholders or partners allow it and the circumstances of the liquidation support it. In-kind distributions need proper documentation and valuation, and must not prejudice creditors or anyone else entitled to payment.

No, and treating them the same is a recurring error. A société en commandite spéciale (SCSp) is a contractual partnership without separate legal personality, and its liquidation is driven principally by the limited partnership agreement (LPA), which sets out how the wind-down runs, who conducts it and how the closing accounts are approved. The three-step corporate process used for an SARL or SA should not be applied to an SCSp by default. Start with the LPA.

Where applicable, the liquidator reports annually on why the liquidation remains open and on the progress made. A long-running liquidation also continues to generate accounting, tax, corporate and, for regulated or supervised vehicles, regulatory obligations, so an open liquidation is not a dormant one.

A solvent voluntary liquidation must not be used to work around insolvency law. If the conditions for bankruptcy or another insolvency procedure are met, the liquidator and the governing body have to consider the appropriate legal process rather than continuing an ordinary voluntary liquidation. This assessment should be made early and documented.

Later than most people expect. Distributing the cash does not close the file. Final closure typically also requires the corporate filings and closing general meeting, tax clearances and final returns, deregistrations, termination of service providers, closure of bank accounts, treatment of residual and unclaimed amounts, and retention of the corporate records for the applicable period.

A pre-liquidation review usually saves more time than it costs. It surfaces unresolved receivables and creditor balances, open contracts and guarantees, unfiled returns and tax exposures, AML and KYC gaps, bank account and signatory issues and service-provider dependencies — all of which are cheaper to fix before the liquidation opens than during it.

Amana generally applies a fixed fee for the liquidation mandate, agreed at the outset based on the expected complexity and scope of the wind-down. The fee takes into account factors such as the legal form of the entity, number and nature of remaining assets and liabilities, outstanding receivables, number of creditors or investors, expected distributions, tax and regulatory matters, and the amount of coordination required with the company’s existing service providers. Amana does not generally apply time-based billing for the ordinary liquidation mandate. This gives the client visibility over the expected cost from the beginning of the engagement.

Where a liquidation remains open for more than twelve months, a minimum fixed monthly continuation fee may apply from that point onwards to cover the ongoing responsibilities of the liquidator, including governance, monitoring, reporting and continued coordination of the liquidation. Any such continuation fee is agreed in the engagement letter at the outset.

Third-party costs — including notary fees, publication and filing costs, audit or commissaire à la liquidation fees where applicable, accounting, tax compliance, legal advice and other external provider fees — are separate from Amana’s liquidation fee and are borne by the entity or client.

Yes, for Luxembourg companies, SPVs and investment structures — coordinating the wind-down from the opening of the liquidation through settlement, reporting, distributions and final closure.