Liquidation is the process under the Corporations Act by which the affairs of a Company are wound up and its assets distributed, firstly among creditors and, in the event of a surplus, amongst its members.
Liquidations also enable the investigation of the circumstances giving rise to the liquidation, including the examination of officers of the Company and any person who may have information, in order to trace any unfair dispositions or potentially recoverable property.
Liquidations can be commenced voluntarily by members. If a liquidation is commenced as a members voluntary liquidation, and the Company is insolvent, it will become a creditors voluntary liquidation.
Liquidations may also be commenced by the Court on a number of grounds, the most common being insolvency. The most common process adopted is by the service of a Statutory Demand which, if not satisfied, cause an act of insolvency on the part of the Company and gives the creditor the right to apply for a Court ordered winding up.
Liquidations may also be commenced by the appointment of a provisional liquidator in circumstances where there are reasons to have someone take control of the affairs of the Company and investigate those affairs. This may occur in circumstances of deadlock, where there is an underlying dispute.
A Company may also be wound up by a Court if it is established that it would be just and equitable to do so. Access has acted for and against many liquidators and is very experienced in using the processes of winding up for the benefit of Companies, their creditors, directors and members.