What is liquidation?
There are different forms of liquidation including members’ voluntary liquidation, creditors’ voluntary liquidation and compulsory liquidation. A members’ voluntary liquidation is where a company is solvent and able to pay its debts but the shareholders wish to cease trading and wind up the company’s affairs. A creditors’ voluntary liquidation is where the directors of a company believe that the company is insolvent and can no longer trade. A compulsory liquidation is where a creditor of the company applies to the court for an order winding up the company.