Liquidations
Liquidation is the process of realising the assets of a company and distributing the proceeds to its creditors and members in the order of priority, which would have been predetermined by the company legislation.
There are three types of liquidations:
- Members' Voluntary Liquidation
- Creditors' Voluntary Liquidation
- Court Liquidation
Members' Voluntary Liquidation
A Members' Voluntary Liquidation takes place when a solvent company, acting through its directors and members, decides to wind-up the company. If a company becomes insolvent, it means that it has insufficient assets to cover its liabilities and therefore the shareholders would get nothing when liquidated.
A Members' Voluntary Liquidation generally occurs when a solvent company is not making profit and its future also looks bleak, so the directors and shareholders decide to wind up the company so that the shareholders won't be left empty handed.
It involves realising its assets and distributing the surplus to its shareholders.
We assist the directors by providing them with advice, preparing the Declaration of Solvency, helping them follow the necessary steps for the calling of the Extraordinary General Meeting (EGM), and assisting with the necessary filing requirements.
Creditors' Voluntary Liquidation
A Creditors' Voluntary Liquidation is normally initiated by the insolvent company, acting through its board. In a Creditors' Voluntary Liquidation, the liquidator's main aim is to try give the creditors back all the money that the company owes to them.
We assist in this process by advising the directors of their statutory responsibilities, assisting the company in meeting the procedural requirements for placing it in liquidation, accepting appointment as Liquidator and realising the assets of the company for the benefit of all the creditors.
Court Liquidation
A Court Liquidation is commenced by order of the court on foot of a petition. The petitioner in a compulsory liquidation is normally a creditor who will argue that the company is unable to pay its debts.
We accept appointments as court or official liquidator.
Following the appointment, our approach is to realise the assets of the company for the benefit of the creditors.