To terminate their business, the partners must first dissolve it. They will then have to trade for a liquidation period. Once this is completed, end-of-account statements are drawn up and the liquidation balance sheet is calculated. The latter can give rise to a liquidation deficit, i.e. a negative result.
Foundation-company-ricard discusses a complete dossier on the liquidation deficit, structured around 4 themes:
- Definition of liquidation deficit
- Calculation of liquidation deficit
- Attribution of liquidation deficit
- Deduction of liquidation deficit
What is the liquidation mali?
Le liquidation malpractice and the capital decline of partners of a company in liquidation. At the end of the liquidation procedures, they receive less money than they initially put in.
Le amicable liquidator or court sells assets, collects receivables and pays off debts. Liquidation accounts are then established, and the result is calculated. If expenses are greater than revenue, a small is observed. It must then be validated by the partners and additional decisions must be made.
Throughout the procedure, strict formalism must be respected. Once the operation is completed, the company must request its deletion from the RCS. Here are the steps to follow depending on the legal status:
1 - Dissolution et liquidation of a SASU
2 - Dissolution et liquidation of an EURL
3 - Dissolution et liquidation of an SAS
4 - Dissolution et liquidation of an LLC
How to calculate the amount of the liquidation mali?
The calculation of liquidation malpractice can be done using two different methods: additive method or the method subtractive.
In the additive method, different components of the liabilities of the liquidation balance sheet are added. The result obtained is always less than the amount of the share capital (otherwise it would be a liquidation bonus).
Mali of liquidation = reserves of any kind (legal, statutory, optional, etc.) + creditor retained earnings – debit retained earnings +/- result of liquidation operations
In the subtractive method, one chooses an integral item of the liabilities of the liquidation balance sheet (equity) to reduce it by one of its elements: the share capital.
Mali of liquidation = equity – share capital
How to attribute the liquidation mali?
Le liquidation malpractice is, in fact, distributed among the partners. Each person owns a portion of the loss, depending on their investment in the share capital and the number of securities held. In practice, it is necessary to run a pro rata (shares owned/total company shares). When the company has only one partner (EURL or SASU), he suffers the entire loss.
Example: The liquidation of a SARL results in a loss of – €2. Its capital was divided into 500 shares of €500, including: 10 shares allocated to Mr “A” and 400 shares granted to Mr “B”. Here are the rules for sharing the liquidation bonus:
| Partners | Participation percentage | Distribution of mali | Capital recovered |
| A | 80% | 2 000 € | €2 (out of €000) |
| B | 20% | 500 € | €500 (out of €1) |
Is it possible to deduct the loss of liquidation?
Le tax treatment applied to the loss generated by a liquidation malpractice depends on the status of the partner (natural or legal person).
In the case of a Physical person, capital loss produced by this mali cannot be deducted. It cannot be set off against personal income and the partner does not recover all of his initial investment.
When the partner is a Corporation, it is necessary to know the holding period titles. If it is less than 2 years, the capital loss is short term and deducted from the taxable results. Otherwise, i.e. if it is greater than or equal to 2 years, the capital loss is long-term and can only be set off against long-term capital gains realized in the following ten years.
What is the definition of liquidation?
Réponse:
Liquidation is the process by which a company ceases its activities and operations, distributing its assets to shareholders and creditors.
How to calculate the liquidation?
Réponse:
Liquidation is calculated by determining the value of assets and deducting debts and other business expenses. The difference is then divided between shareholders and creditors.
What is the imputation and deduction in liquidation?
Réponse:
Imputation is the process by which debts and other business expenses are deducted from the value of assets. Deduction is the process by which shareholders and creditors receive their share of assets remaining after imputations.
