When Companies Go Dark Or Are Deregistered
A company can be forced to deregister if it is no longer trading and has not complied with financial review regulations.
By deregistering, a company can avoid costs of public filing, legal fees and accounting fees and improve its bottomline. The company is also freed from strict compliance rules and public disclosure regulations. But the disadvantages are also many. Operating as a private entity means attracting investors and funds might become difficult with the company stock going down. There are lesser alternatives for incentive programs. Employees who have a stake in the company may find their stock has little or no value in the open market, which may lead to dissatisfaction and an exodus of talent.
But for companies finding the cost of compliance and regulation tough, deregistration can be a viable option. Deregistration rules vary according to the country of operation.
Delisting or deregistration is also known as “going dark”. This happens when a company stops filing public reports required by statutory regulations of a country, thereby putting an end to any publicly available information on the company—in other words going dark
A business can also be liquidated. Liquidation means, a company’s assets are used to pay off any debts or liabilities before it is closed. This happens when a company becomes insolvent. A liquidator is appointed by the concerned authority to see that the assets are duly disposed off and the claimants compensated adequately. After which the business ceases to exist.
In simpler terms liquidation can also mean selling a securities position for cash. These risks are the reason why you should look into securing professional indemnity insurance and risk management in your business2019-10-30 00:33:45, views: 271, Comments: 0
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