Yes. When a company is dissolved with liquidation, each shareholder is entitled to a share of the assets remaining after liquidation. Distribution takes place only after all creditors have been satisfied; shareholders come last. By default, the share follows the ratio of the shareholder’s paid contribution to all paid contributions, unless the memorandum specifies another method.
What are the remaining liquidation proceeds?
When a company is dissolved with liquidation, its assets are realised and liabilities paid. What remains is the liquidation surplus. Under Section 61(4) of the Commercial Code, a shareholder is entitled to a share of those remaining proceeds. It is the final economic right associated with their participation in the company.
When do shareholders receive payment?
Priority is crucial. The liquidation surplus is, by definition, what remains after all company creditors have been satisfied. Shareholders receive their shares at the very end, if anything remains at all. If company assets are insufficient to cover liabilities, there is no surplus and nothing is distributed. This is a consequence of limited liability working both ways.
How is the share calculated?
The share is determined by the ratio of the shareholder’s paid contribution to the paid contributions of all shareholders, unless the memorandum provides otherwise (Section 153(2)). As with a settlement share, the memorandum may set a different allocation, so check it. Liquidation is conducted by a liquidator appointed by the general meeting (Section 153(1)).
How to handle it correctly
Proper liquidation is a formal process with defined steps: notice to creditors, an asset inventory, payment of liabilities, distribution of the surplus and removal from the register. We manage the whole process, including calculation and payment of shareholders’ portions, through company liquidation. Distribution rules can be set in advance in the memorandum of association. If shareholders dispute the amount or allocation, we help through shareholder dispute resolution.
This answer provides general information on the law as at 17 August 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
