Voluntary Liquidation for Insolvent Companies Commenced by Directors/Shareholders

Although this type of liquidation can only be instigated by the directors and shareholders of a company, the correct term for this type of liquidation is a 'Creditor's Voluntary Liquidation'.

The appointment of liquidators in this type of liquidation has, as of 1 January 2008 been made simpler and far quicker. In fact, a Creditor's Voluntary Liquidation is the quickest, simplest and most inexpensive method of appointing a liquidator to an insolvent company.

Provided the directors and 95% of shareholders are in agreement with the decision to make an insolvency appointment, and where the necessary documentation is completed and signed, the appointment of liquidators can be made virtually immediately.

• What are the steps required to place a company into a Creditors Voluntary Liquidation?

Once it is resolved to place the company into liquidation, the liquidator is required to convence a meeting of the company's creditors within 11 days of appointment. Liquidators do this by advertising the appointment as liquidator and the meeting details in a daily newspaper in each state in which the company traded. Liquidators are also required to contact the company's creditors directly - in writing.

• What information does the Liquidator send to creditors?
• Why place a company into liquidation?
• Do I have to attend the liquidation meeting?
• Frequently asked questions - Liquidation