Corporate Insolvency

Liquidation

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Liquidation is the process of winding up a company’s financial affairs.

Typically, a company is placed into liquidation because the company cannot pay all of its debts (i.e. it is insolvent). Liquidation is a formal process to dismantle a company’s affairs. It can provide relief to those running the company by placing company control into the hands of a third party - a liquidator. The liquidator then deals with the company’s operations and its debts.

Background

Why choose liquidation

Liquidation is the only way to fully wind up the affairs of a company and end the existence of the company. An independent party undertakes the process and protects the interests of creditors, directors, and members while the company structure is dismantled.

Liquidation allows a fresh start for the directors and can give immense relief from the stress and burden being carried.

How we help

Difficult business or director-related financial situations.

We operate as specialists in a unique sector, dealing with bad debts and distressed businesses and personal finances. We have the tools and framework to lead all parties through choppy seas. Tough situations often mean honest conversations and we will never shy away from the straight talk that insolvency demands.

Members' voluntary liquidation

Winding up a solvent company when its directors believe that the company can pay all its existing debts in full within 12 months is known as a members’ voluntary liquidation.

Members' voluntary liquidation

Receivership

A receivership's purpose is for a secured creditor to take control via a third-party known as a receiver (or receiver and manager) to assume control of some or all of the company's assets.

Receivership

FAQs

Some questions you may like answered.

Can liquidation be made voluntarily?

Yes, if the business is trading through a company structure and the applicants are the director and shareholder. Contact us to get a clear picture of what options you may have.

What if the company is solvent?

Solvent companies can be wound up via a members' voluntary liquidation. Go to the link shown above.

What if I'm a sole trader?

Liquidation and voluntary administration are for businesses trading through a company structure (incorporated companies and trust structures). For businesses trading as a sole trader structure, those debts can be dealt with through bankruptcy or other debt solutions mechanism. Go to our personal insolvency page to learn more.

What about the new simplified liquidation process?

Should the company meet certain eligibility criteria, the liquidator may adopt the simplified liquidation process rather than the existing approach. Go to our simplified liquidation page to learn more.

The criteria for a simplified liquidation:

the company has passed, a special resolution that the company be wound up voluntarily.

the directors give the liquidator a report concerning the company’s affairs and a declaration that the company will be eligible for the simplified liquidation process.

the company is insolvent.

the company’s total liabilities do not exceed $1 million.

no director has been a director of a company that has previously used the simplified liquidation process or a debt restructuring process.

the company’s tax lodgments are up to date.

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