The offshore financial industry differs from most traditional financial centers. Often based on the common law legal system, the separation of the legal entity with its ownership and control is paramount. Build on this fundamental principle, several rules must be followed to utilize the full potential and avoid mishaps and potential liabilities.
Several reasons exist to reactivate or reinstate an offshore company. The reactivation and reinstatement procedures can be time-consuming, expensive and bothersome. Consequently, most of our customers who need help with the reactivation and reinstatement procedures of their offshore company ask us for help to liquidate the company as well.
Winding up procedures are critical. Liquidation and dissolution of an offshore company are formal procedures. These formal procedures even apply for company voluntary arrangements to liquidate an offshore company. The winding up procedures involve the processes by which the assets of the company are collected in and realised, the liabilities are then discharged and when there still is a surplus, distribution to the persons entitled to it takes place.
Insolvency Acts in offshore jurisdictions find their origin in common law and modified universalism. This means that the jurisdiction best placed to deal with the dissolution process must be established, while taking into account the sovereign rights of the other jurisdictions involved. The procedures are furthered to avoid fraud against creditors.
Following the above, Legal Floris LLC and Equation CS play a role in the administrative dissolution process, but where foreign courts must be involved local representation may be required as well. Therefore, we take liquidation and winding down procedures after reactivation serious, and strategize with our clients to assure compliance and cost-efficiency.