Court Ordered Liquidation Nepal

Company Liquidation Process in Nepal: Types, Laws, and Procedures Explained

Company liquidation in Nepal is a formal legal process of closing a company and distributing its assets after settling all liabilities. Governed by the Companies Act, 2063 (2006), and the Insolvency Act, 2063 (2006), liquidation can be voluntary—initiated by shareholders, or compulsory—ordered by the court due to insolvency, misconduct, or non-compliance. Voluntary liquidation can be either members’ or creditors’ based, depending on solvency status. The court-ordered liquidation is executed when the company fails to settle debts or operates unlawfully. A licensed liquidator oversees the liquidation process, handling asset sales, debt settlements, legal claims, and final deregistration of the company. Liquidation ensures the company closes transparently and legally, safeguarding the rights of creditors, shareholders, and the public. This comprehensive guide details types, processes, conditions, and the legal framework applicable to liquidation in Nepal. Understand your rights and responsibilities during company closure.