Voluntary liquidation is a common business management decision concerning various types of investment vehicles at the end of an investment lifecycle. This phase is very often a challenge for management who are typically operating vehicles as a going concern and who are also more geared towards launching new products. During this phase, specific legal, operational, and financial aspects must be considered, as well as their timing.
The solvent/voluntary liquidation process is governed by the Articles 1100-1 to 1100-15 of the amended and renumbered Law of 10 August 1915 on commercial companies and by the laws applicable to each type of investment vehicle (UCITS1, funds of Part II of the Law of 17 December 2010, SIF, RAIF, SICAR, etc.). For a fonds commun de placement (FCP), which has no legal personality, its management company automatically assumes the role of liquidator. However the latter can contractually transfer its responsibilities by appointing a professional liquidator. By analogy with funds established in a corporate form, the liquidation will be guided by the Law of 10 August 1915 and the relevant investment vehicle laws aforementioned.
According to the provisions of the law, the shareholders must vote for liquidation during a general meeting held before a Luxembourg notary. Should it be required, the same shareholder’s meeting may also appoint a CSSF-accredited liquidator. The liquidator may be a company, in which case the physical representative of the company for the liquidation purpose will need to be accredited as well.
Depending on the degree of regulation, a supervisory authority may accept that only a well-seasoned and reputable liquidator be appointed. Unregulated entities can appoint any person or company, which, in the case of an investment vehicle, may be a shareholder, a director, or the management company.
There are multiple reasons for management to require a third-party specialist to be appointed as liquidator—therefore, in what situation is it advisable to rely on a professional liquidator?
At the same time, the motivation can depend on a wealth of different factors, from liquidity to complexity. So what should management of an investment vehicle ask themselves when submitting their liquidation proposal to the approval of the shareholder(s)? Initial steps could be answering in the accordions at the bottom of the page.
Deloitte’s liquidation services offering allows management to free-up time and instead focus on their day-to-day business while our dedicated team handles the liquidation process thanks to:
From your first thoughts surrounding an exit through to completion, we can offer our assistance by creating a detailed step-by-step plan that considers all organizational aspects and addresses the relevant challenges and risks beforehand. By considering current market changes, regulatory transformations, and the globalization of the market, we can help you navigate the liquidation of your company.
1 Undertakings for Collective Investment in Transferable Securities as per EU Directive 2009/65/EC
2 Anti-money laundering/know your transaction