Creditors Voluntary Liquidation
A Creditors Voluntary Liquidation occurs when the directors and shareholders of a company resolve that that company is insolvent and it’s affairs should be wound up. A Creditors Voluntary Liquidation can also follow a Voluntary Administration.
Creditors Voluntary Liquidation is commonly referred to by the general public as Business Liquidation. This is because the majority of Creditors Voluntary Liquidations are due to business failure, therefore the term business liquidation is used. A Creditors Voluntary Liquidation is a fast and effective strategy to deal with a company that can no longer pay its debts and assists directors in complying with their statutory duties.A Liquidator is appointed by the company’s shareholders or creditors and undertakes the following tasks.
- secures and realises the company’s assets
- investigate and report to creditors about the company’s affairs,
- enquires into the failure of the company and possible offences by people involved with the company and reports to ASIC
- distribute the proceeds of asset realisation to creditors
- apply for deregistration of the company on completion of the liquidation.
In some cases it is now possible to avoid personal liability under a Director Penalty Notice issued by the Australian Taxation Office by the use of a Creditors Voluntary Liquidation
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For further information on Creditors Voluntary Liquidation contact the team at Rapsey Griffiths for a confidential consultation.