Voluntary Liquidation
Voluntary Liquidation is the process by which the directors of a company, with the assistance of a licensed insolvency practitioner, put the company into liquidation. This is to be contrasted with a Compulsory Liquidation, which is a method by which a creditor issues a petition through the Court to have the company wound up.
In a Voluntary liquidation, if the company ultimately has sufficient assets to be able to pay all of its creditors in full (together with all costs) it will be a solvent liquidation, or Members Voluntary Liquidation. If however the company has insufficient assets to pay all of its creditors in full it will be an insolvent liquidation, or Creditors Voluntary Liquidation. This Creditors Voluntary Liquidation is the most common form of Voluntary Liquidation.
Company and Business Liquidation
In order to put a company into Creditors Voluntary Liquidation a meeting of the company’s directors is held to instruct a licensed insolvency practitioner to assist them to convene meetings of the company's members (shareholders) and creditors.
The members meeting is held first and it is at this meeting that the resolutions putting the company into Creditors Voluntary Liquidation and appointing a licensed insolvency practitioner as Liquidator, are passed. Immediately after that meeting the meeting of the company's creditors is held. This gives creditors the opportunity to question the directors as to the reasons for the failure of the company and to put forward any alternate Liquidator.
Once appointed the Liquidator takes control of the company and its assets.
Company Liquidation – Financial Advice Staffordshire – Filing For Bankruptcy – Winding Up Company – Insolvency Services – Debt Management
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