The voluntary liquidation of a legal entity starts with a resolution of the shareholders, members, an interested party or the Court (as the case may be) to that effect. The liquidator needs not be a resident of the BES islands and can be either an individual or a company. In the absence of the appointment of a liquidator, the board or the Chamber of Commerce and Industry (as the case may be) are to act as liquidators.
Once a company is in liquidation, the liquidator manages the affairs. The legal entity continues to remain in existence, but only insofar as this is necessary for the liquidation and dissolution of its affairs. The liquidator converts the assets of the legal entity into cash, settles the relationships with third parties and pays the debts. The balance that remains after payment to the creditors is distributed to the persons that are entitled thereto by virtue of the articles of association, or to the members or shareholders. If the assets are not sufficient to pay all debts, the liquidations must file the legal entity’s bankruptcy and the liquidation is then converted into a bankruptcy subject to the Court’s supervision.