A voluntary liquidation occurs when the shareholders, usually at the directors' request, decide to put a company into liquidation because it is redundant or insolvent. Either the company cannot pay its debts as they fall due, it has more liabilities than assets or it is not meeting the initial objectives it set out for.
As part of a liquidation process, a warranted liquidator has to be appointed with the duty to collect the company's assets and distribute them to its creditors in accordance with the law.
What are the powers of a liquidator?
A liquidator's powers are wide and include powers to sell the company's assets, to bring and defend legal proceedings and to pay dividends to the company's creditors.
When is the liquidation complete?
The liquidation is complete when all the assets have been realised, all creditors' claims have been adjudicated (where there are sufficient funds) and nett realisations after expenses of the liquidation have been distributed to the creditors.
To conclude the liquidation, the liquidator will call final meetings of creditors and shareholders and present final receipts and the payments account, together with a detailed report showing how the liquidation has been conducted