Explanation of Article 20
The article explained how the legal personality is terminated and mentioned several methods for this termination without limiting them. Therefore, the legislator in any other system can add other methods for the termination of the legal personality. The methods of termination stated in the article include:
-
First: The expiration of the period specified for it in its system. For example, if a specific duration is set for the company, once this period ends, its legal personality is terminated.
-
Second: The fulfillment of the purpose for which it was established. For example, if the company was established to carry out a specific project, once this project is completed, its legal personality is terminated.
-
Third: If the system stipulates its termination. For example, the Companies Law may stipulate the termination of the company's legal personality in certain cases.
-
Fourth: Merger, which means the combination of two or more companies into one company; resulting in the dissolution of the legal personality of the merged companies and the surviving company taking their place with respect to their rights and obligations.
-
Fifth: Bankruptcy, which is the cessation of the legal personality from regularly paying its due commercial debts; resulting in the legal personality entering into a liquidation phase.
-
Sixth: Liquidation, which is a set of procedures aimed at ending the activities of the legal personality and distributing its remaining assets to the partners or shareholders, resulting in the dissolution of the legal personality.
It should be noted that the termination of the legal personality - by one of the aforementioned methods or others - results in the dissolution of the legal personality and its independent financial liability, name, domicile, and other characteristics of the legal personality. However, this does not result in the dissolution of its debts; rather, they are transferred to the general or specific successor.
Related To
Article 20
Property is anything that has a non-negligible material value in dealings, whether it is an asset, usufruct, or right.