Different Types of Company Liquidation
Liquidation of assets is an inevitable part of closing a business’ doors. If you have to liquidate your company, there are important details and steps you need to know to simplify the process and choose the right process for your closing business.
What is a Company Liquidation?
Company liquidation is the steps made to close a business and pay back any applicable debts remaining. There are three different options for companies when they decide to liquidate.
Creditors Voluntary Liquidation
This liquidation format is appropriate for your company if you have quit trade or plan to, and you have unpaid debt that you cannot pay. In this process, the company directors and shareholders find a person to be the registered liquidator. They will be in charge of selling the remaining profitable assets and distributing funds to the appropriate parties.
The court liquidation process is applicable when a creditor applies for the court to order your company to finalise operations and close sales. You might receive a statutory demand to pay all of your debts in 21 days or less. If this remains without pay, the creditor can go to court to speed up the process and receive their funds.
Members Voluntary Liquidation
This liquidation method is appropriate for when the business closed trade operations and has been able to pay its debts in full. From this step, companies can choose to distribute the remaining assets and funds to their shareholders. The company must pay all debts in full before the payment of dividends and other shareholder funds.
Assistance from Insolvency Services Australia
We understand the challenges of liquidation. For assistance and consultation, contact Insolvency Services Australia at 1800 003 883. We offer 24/7 expert business advice and can help you finalise the closing of your business.