Liquidation is a way in which a company realises its assets and distributes the proceeds in an orderly manner compliant with company law. It is a formal process involving Directors, Members, Creditors and the appointment of a Liquidator.
Once appointed the Liquidator becomes responsible for the management and ultimate closure or sale of the company.
- Voluntary Liquidation is where the company itself actively seeks to appoint a Liquidator in order to close down the company in an orderly and controlled manner
- Involuntary or Compulsory Liquidation is where a company is forced into appointing a Liquidator to close down the company. This type of event is most commonly initiated by Creditors and the Liquidator is appointed by the Courts.