There are two ways a company can be placed into liquidation: voluntarily, or involuntarily.
- Creditors Voluntary Liquidation (CVL)
Voluntary liquidation occurs when the directors and shareholders make the decision to have the company wound up. If 75% of the shareholders approve of the liquidation the vote will pass and the liquidator gets appointed immediately.
If a company is liquidated voluntarily the directors and shareholders can appoint a liquidator of their own choosing. This is the fastest and most cost-effective method for winding up a company.
- Court Liquidation (or Compulsory Winding Up)
A company liquidation is involuntary when it is forced upon it by the company’s creditors. When an application has been made by a creditor to have the company wound up, the directors no longer have the option of doing it voluntarily. They will also be unable to appoint a liquidator of their choosing; as it will be in the hands of the creditor who made the application to court..
For 24/7 advice on voluntarily placing your company into liquidation, call us on 1800 003 883.