18 September 2020
The Revival of Companies that Have Completed Voluntary Liquidation
In a case, there is a receivable claimed against a liquidated company, a lawsuit requesting the revival of the company may be initiated in accordance with the Turkish Commercial Code numbered 6102 (“TCC”). Revival can be described as the process of bringing back to life a company that has been liquidated and deregistered from the trade registry. Although revival is legally possible, there are practical problems regarding the collection of receivables which have not been addressed by the legislation.
Types of Receivables That May Cause Revival
According to the provision of the TCC that constitutes the legal basis of the revival, an additional liquidation process might be implemented if the liquidated company has accrued debt. However, the type of due balance has not been determined in the relevant legislation. In light of the precedents of the High Court of Appeals, the due balance of the liquidated company might be based upon the commercial relations or tortious act. In this regard, revival may be requested on the basis of damages caused to third parties by a product that was produced by the company before liquidation.
Who Can Claim Revival Lawsuit, Against Whom?
Liquidated companies have no legal entity, thus they cannot be a party to a litigation process. For this reason, the revival lawsuit should be directed at the liquidation officer and the trade registry directorate that has de-registered the company due to the finalization of liquidation. Although the lawsuit is claimed against the liquidation officer that does not mean that the liquidation officer is responsible for the alleged receivable with his/her personal assets.
Consequences of the Revival Lawsuit
In the event of the revival, the lawsuit is concluded successfully, the liquidated company shall be re-registered to the trade registry and acquire a legal entity once again. The court that has issued the revival decision may appoint the previous or new liquidation officers for the additional liquidation process. Additional liquidation is made solely for the receivables that are subjected of the revival lawsuit, and the liquidation officers shall not have the authority to undertake any other action.
Effect of Revival Lawsuit on Collection of Receivables
The action of debt and revival lawsuits constitute different legal actions. In addition to the revival lawsuit, a lawsuit for a receivable claim should be initiated and concluded on behalf of the creditor. In a case the debt of the revived company is finalized as a result of the action of debt, the amount may be collected through execution proceedings. The revival of the company may result in additional complications as it does not automatically result in the consolidation of assets in the company.