A company’s difficulties do not necessarily lead to liquidation. Book V of the Commercial Code, reformed by Law No. 73-17 in 2018, sets out a range of graduated procedures, from prevention to judicial liquidation.
Prevention
When difficulties are likely to compromise the continuity of the business, the owner can apply to the president of the commercial court, in particular for the appointment of a special representative or the opening of conciliation with the main creditors.
Safeguard
The safeguard procedure, introduced by the 2018 reform, is for a company that has not yet stopped paying its debts but faces difficulties it cannot overcome alone. It suspends creditor actions and allows a plan to be drawn up.
Receivership and liquidation
A company that has stopped paying its debts must apply for receivership or judicial liquidation within the time limit set by law. Receivership aims at a continuation or sale plan; liquidation applies when the situation is irretrievably compromised.
Act early
The earlier the step is taken, the more options there are. Waiting until payments stop reduces room for negotiation and can expose the manager to sanctions if they were slow to act.
The firm's view
The best procedure is the one you choose, before it is imposed on you.
Maître Malak Elimani advises managers and creditors in prevention proceedings and in proceedings for companies in difficulty. This article provides general information and is not a substitute for legal advice.
Reference texts
Further reading
- Business and company law
- Setting up a SARL in Morocco: the steps and what to watch for
- Termination of a commercial contract: how to protect yourself
- Remote working and the employment contract in Morocco: what to provide for
- Filing a criminal complaint in Morocco: the steps and what happens next
- Managing property in Morocco from abroad: powers of attorney
The information on this website is general and does not replace legal advice. Every situation requires an analysis of its own facts and documents.