All companies, whether sole proprietorships or partnerships/corporations, must initiate a liquidation procedure immediately after their dissolution. The exception is dissolution due to bankruptcy or insolvency proceedings, where a liquidation procedure in this sense is not followed, but rather the winding-up procedure provided for in Greek insolvency law.
The general reasons for the dissolution or initiation of liquidation for all commercial companies include, in particular: the expiry of the duration of the company specified in the articles of association, a resolution passed by the shareholders with a majority vote, the termination of the company by one of the partners (in the case of partnerships), the loss of legal capacity of one of the partners (general partnership), and so on.
The liquidation procedure is opened immediately upon publication of the company’s dissolution. The liquidators (who are appointed to this position either by the resolution on dissolution or by a provision in the articles of association) are obliged to prepare the opening balance sheet of the liquidation, as well as an inventory of all assets, liabilities, and claims of the company. The actions within the scope of the liquidation must always have the purpose of winding up the company as quickly as possible, so that all claims of the company can be liquidated and all liabilities of the company can be paid. This is indeed not always easy, which is why a liquidation procedure can take several years. Claims of the company that cannot be collected are usually written off, while claims against the company are paid either by capital injections from the shareholders or by continuing the company’s activities and thus generating profits. According to the legal regulation, the liquidators can decide on such a continuation of activities, but this can only pursue the purpose of generating sales or profits so that claims against the company or other outstanding issues can be resolved more quickly.
As soon as all outstanding matters have been wound up, the company’s remaining assets are distributed to the shareholders according to their respective shares, and the final balance sheet of the liquidation is prepared, which must then be published in the commercial register and with the tax authorities.