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Beatriz Milla Martí Notary · Es Mercadal, Menorca

Company Law · Menorca

Dissolution and/or liquidation of a company

Updated 17/07/2025

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The dissolution of a company is the legal act by which it is decided to bring the existence of a commercial or civil company to an end, thereby ending its business activity. It is the first step towards extinguishing the company, which does not disappear immediately but instead enters a process known as liquidation.

Liquidation is the process that follows dissolution, during which all the operations needed to wind up the company are carried out: debts are paid, receivables are collected, assets are sold and, finally, the remaining assets are distributed among the members or shareholders before the company is definitively extinguished.

What is dissolution and liquidation for?

  • To formally bring the company and its activity to an end
  • To settle outstanding obligations and terminate contracts
  • To liquidate the company's assets and share them out among the members or shareholders
  • To obtain removal from the register for final legal extinction

What does the notary do in a dissolution and liquidation?

  1. Authorises the resolution to dissolve adopted by the General Meeting or the members
  2. Drafts and records the public deed (escritura pública) of dissolution and, where applicable, of liquidation
  3. Verifies that the legal and statutory requirements for dissolution are met
  4. Facilitates registration of the dissolution and liquidation with the Companies Registry (Registro Mercantil)
  5. Can advise on the process and the documentation required for liquidation

Stages of dissolution and liquidation

  • Approval of the dissolution by the members or shareholders
  • Opening of the liquidation process: appointment of liquidators
  • Carrying out the liquidation operations: paying debts, collecting receivables, selling assets
  • Distribution of the remaining balance among the members or shareholders
  • Drafting and signing of the deed of extinction
  • Registration with the Companies Registry so that the company is struck off
  • Dissolution may be voluntary or compulsory, depending on the grounds established by law
  • Approval must meet the quorums and majorities required by the articles of association and the law
  • The liquidators act as legal representatives during the liquidation
  • The process can take months, depending on the complexity of the assets and liabilities
  • Until it is struck off the register, the company retains its legal personality, but without any activity

Formalising the dissolution and liquidation by notarial public deed and registering it with the Companies Registry is essential for the legal extinction of the company, providing legal certainty to members and third parties and avoiding future liabilities.

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