Turboliquidation is popular among entrepreneurs seeking to terminate their company quickly and cost-effectively.
With a single resolution by the shareholder(s) and registration with the Chamber of Commerce, the legal entity can cease to exist—provided that no assets remain. However, this does not automatically eliminate outstanding debts. Creditors may still petition the court to declare the company bankrupt. Below, you’ll find what is required for such a bankruptcy declaration and why careful application of turboliquidation is essential.
A court may declare a company bankrupt if:
When filing for bankruptcy of a company that has undergone turboliquidation, a fourth requirement applies: it must be plausible that the company still has assets. These may include a positive bank balance, inventory, shares in other companies, or receivables. Case law also shows that not only existing but also potential assets may suffice.
Potential assets may include:
If the applicant can plausibly demonstrate that the company still holds potential assets—and the other bankruptcy conditions are met - the court may declare the company bankrupt.
Recently, the Arnhem-Leeuwarden Court of Appeal declared a turboliquidated company bankrupt based on the existence of potential assets (ruling). The company had made payments to an affiliated entity shortly before liquidation, without a written agreement. Additionally, there was ongoing work for which no invoices had yet been sent.
For entrepreneurs considering turboliquidation, the key takeaway is: be thorough and accurate in verifying that the company no longer holds any assets. This reduces the risk of creditors filing for bankruptcy after the fact. For creditors facing a turboliquidated debtor: do not abandon your claim too quickly. If there are signs of remaining (or potential) assets, there are still legal avenues available—even after turboliquidation—to avoid being left empty-handed.
Considering turboliquidation or unsure whether assets remain? Are you a creditor of a company that may have improperly used turboliquidation? Contact Jarno de Graaf, Attorney at law specialized in Corporate Law.
Last week, it was announced that the Temporary Transparency Act on Turboliquidation will be extended by two years. This law introduces measures to prevent abuse and enhance legal protection for creditors. Want to learn more? Read this blog by my colleague Sonja Geldermans.
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