Liquidation
Liquidation is defined as the process by which a company's affairs are wound up and its existence brought to an end. The process has a long history, developing alongside the law associated with the separate legal existence of companies.
The process is usually invoked when:
- a company has achieved its purpose and the shareholders wish to regain their capital; or
- the company has become insolvent and creditors wish to recover their debts from the company's remaining assets.
There are three (3) types of liquidations:
- Court Liquidation
- Members' Voluntary Liquidation
- Creditors' Voluntary Liquidation
Once an application to wind up a company has been made through the Court, the applicant may seek the appointment of a Provisional Liquidator to protect the company's assets until the winding up order is made.