Closing a company in Saint Lucia involves specific legal and financial steps. This guide explains the process for any business entity, including a domestic company or an International Business Company (IBC). It covers all stages, from the first decision to the final deregistration.
The Legal Framework for Liquidation
Saint Lucia does not have a specific Insolvency Act. As a result, the legal process often uses the United Kingdom’s Insolvency Act and Rules for guidance. This is permitted under the Supreme Court Act. Relying on external law can create challenges, especially for creditor payment priority.
A key court case, FirstCaribbean International Bank (Barbados) Limited v Sunset Village Inc., provides important direction. It clarified that creditors with first charges on assets have priority and are not equal to all other creditors. This ruling shows why legal expertise is important during the creditor settlement stage.
Step 1: Start the Liquidation Process
A company liquidation in Saint Lucia begins in one of two ways:
- Voluntary Liquidation: Shareholders pass a resolution to close the company. This is the most common method for solvent companies.
- Compulsory Liquidation: A creditor or the company petitions the court to order the closure. This usually happens when the company cannot pay its debts.
Appoint a Liquidator
After deciding to liquidate, the company must appoint a liquidator. Shareholders or the court can make this appointment. The liquidator takes control of the company and manages an orderly and lawful closure.
A liquidator’s main duties are to:
- Stop all business operations.
- Identify and gather all company assets.
- Inform creditors and pay all valid debts.
- Give any remaining funds or assets to shareholders.
Step 2: Manage Finances and Settle Debts
The financial part of liquidation demands careful attention to legal rules. Non-compliance can lead to large daily fines for the company and its directors.
Handle Debts and Creditors
The liquidator’s first financial job is to find all creditors and pay the company’s debts. This includes:
- Inform Creditors: The liquidator must officially inform all known creditors about the company’s closure.
- Rank Claims: Saint Lucian case law determines how to rank creditor claims. Secured creditors with first charges get paid before other creditors.
- Pay Liabilities: The liquidator uses company assets to pay all debts and taxes.
Complete Tax Reporting
The company must have a clear record with the Department of Internal Revenue before it can close. This includes:
- Get a Tax Account Number: Every company needs a Tax Account Number for reporting.
- Pay Tax Liabilities: Saint Lucia has a 30% tax on income made within the country. All taxes must be paid.
- File Final Tax Reports: The liquidator files all final tax reports and gets clearance from the tax authority.
Step 3: Prepare Documents and Filings
Correct documentation is essential for a legal liquidation. The process requires several key filings with the Registrar of Companies and Intellectual Property.
Required Liquidation Documents:
- Resolution to Wind Up: The official shareholder resolution to start the liquidation.
- Appointment of Liquidator: The document that formally names the liquidator.
- Registry Filings: The liquidator must file updates to the company’s register, including the release of any mortgages or charges on assets.
- Statement of Completion: After managing all debts and assets, the liquidator gives a final statement to the Registrar to confirm the process is finished.
Step 4: Finalize Dissolution and Public Notice
The last steps remove the company from the public record.
Deregister the Company
When the Registrar gets the liquidator’s final statement, they will:
- Remove the Company from the Register: The company’s name is taken off the list of active companies.
- Issue a Certificate of Dissolution: This certificate is the official proof of legal dissolution. This document shows the official date of closure.
Publish a Public Notice
To complete the process, the liquidator must publish a notice of the company’s closure. The notice must be in:
- The Official Gazette: The government’s official journal.
- A Widely Circulated Publication: A local newspaper in Saint Lucia.
Failure to publish this notice can lead to fines, which shows the importance of this final step.
Liquidation for Different Business Types
The general process is for all companies, but some entities have small differences. The table below shows key distinctions.
| Entity Type | Key Liquidation Points | Governing Act |
|---|---|---|
| International Business Company (IBC) | Follows the standard process. Public notice in the Gazette and a local paper is mandatory. | International Business Companies Act |
| Limited Liability Company (LLC) | The company’s Articles of Association outline the dissolution process. Members’ personal assets are safe. | Limited Liability Companies Act |
| Corporation (Domestic Company) | Follows the standard process. Focuses on paying all debts to protect shareholders. | Companies Act |
Alternatives to Liquidation
Before choosing to liquidate, business owners can consider other paths:
- Mergers and Consolidations: An IBC can merge with another company, even a foreign one, if the laws in both places permit it.
- Asset Sale or Transfer: A company can sell its assets to another business. This can provide value without a complete closure.
Following these steps and getting legal advice helps business owners complete a company liquidation in Saint Lucia. This ensures a lawful and organized end to business operations.
