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Ending it Right

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Bringing a company to an end is an unfortunate task that’s often fraught with a host of legal and PR considerations. Here’s how to do it best.

The liquidation process of any company is usually littered with legal complexities that make the process a tricky one. Whether due to crippling financial losses or voluntarily winding-up, each and every company in Jordan should meet all the legal criteria associated with closing down and, eventually, deregistration. 

Rabee’ Zawaydeh, a Jordanian lawyer, told Venture there is no rule of thumb that strictly applies to everyone when it comes to striking off a company, solvent or insolvent. “The liquidation process of a corporation depends on its particular case, the amount and percentage of financial loss, and any other conditions that are leading to the company’s closure.”


For limited liability companies, if the financial loss exceeds 50 percent, then the board should call a general meeting to determine whether they want the company to continue operating in the market. At this stage, financial solutions and remedies are suggested and put in place. 

If the financial loss continues and exceeds the 70 percent threshold, the company, during its annual general meeting, should firmly agree on the steps needed to stem the losses and keep it afloat. This can happen by increasing the company’s capital, and injecting more money from shareholders. 

But if this still doesn’t help, then the legal system steps in to begin the liquidation process. “If the financial loss continues, the company is deemed insolvent by the court, which then hires a registered liquidator to dismantle the firm’s assets and pay off any creditors,” Zawaydeh said.

Generally speaking, a liquidator is automatically granted the role of the company’s director to be able to call important decisions and observe the liquidation process, according to Jordanian law. He or she will report to the Companies Control Department on the status of the liquidation process. 

If a company wants to liquidate its assets and voluntarily close down without having incurred any financial losses, its board should call an extraordinary general meeting and decide on the necessary steps that should be taken, which usually range from paying off creditors to selling all assets and physical belongings. 


Jumana Twal, CEO and founder of Bidaya Corporate Communications, a public relations agency, believes the key to mitigating damage done to a company’s name and the reputation of its investors and management is making sure that both the public and the media understand why the company is being liquidated. 

“Under Article 40 of The Companies Law No. 22 of 1997, an organization must publicly announce its liquidation in at least one local daily newspaper,” Twal toldVenture. “This can either be done by publishing a press release prepared by the company and its PR consultants, or by issuing an official statement on behalf of the company’s management.” 

According to Twal, how and what you communicate depends almost entirely on the reasons behind the liquidation. “It is one thing if a company is shutting down due to economic recession, insolvency, or lack of business feasibility, but something entirely different if it is being forced to shut down due to criminal liability or corruption charges,” she noted.  

If a company is discontinuing its business because of financial difficulties, then it should be as honest as possible, touching on the highlights of its track record, and ending its communications on a positive note. However, if the company is closing down for more controversial reasons, then it should seek legal advice on the best course of action.

Twal says a company should not only close cleanly and quickly – but also positively, especially if it wants to reopen in the future.

“It is paramount that the company is forthcoming in its communications about its situation; misleading the public is a sure way of irreparably damaging its credibility as untruths are always uncovered,” she said. “Generally speaking, it is not recommended that a company reopens under the same name after its liquidation. It would be more prudent to either rebrand, or to reopen under new ownership with a clean slate.”  

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