Liquidation

Empirical methods Prescriptive and policy Liquidation is the process in accounting by which a company is brought to an end.

For efficiency's sake, it will often sell these at a discount to a company specializing in real estate liquidation instead of becoming involved in an area it may lack sufficient expertise in to operate with maximum profitability.

A company may also operate in a "receivership-like" state but calmly sell its assets, for example to prevent its portfolio being written off in the event of an actual compulsory liquidation.

[5] An order will not generally be made if the purpose of the application is to enforce payment of a debt which is bona fide disputed.

[8] An order might be made where the majority shareholders deprive the minority of their right to appoint and remove their own director.

[13] The court may appoint an official receiver, and one or more liquidators, and has general powers to enable rights and liabilities of claimants and contributories to be settled.

[15][16] Voluntary liquidation occurs when the members of a company resolve to voluntarily wind up its affairs and dissolve.

[17] A creditors’ voluntary liquidation (CVL) is a process designed to allow an insolvent company to close voluntarily.

The liquidator will normally have a duty to ascertain whether any misconduct has been conducted by those in control of the company which has caused prejudice to the general body of creditors.

Property which is in the possession of the company, but which was supplied under a valid retention of title clause will generally have to be returned to the supplier.

In business terms this will mean liquidating a company as the only option and then resuming under a different name with the same customers, clients and suppliers.

In some circumstances it may appear ideal for the directors; however, if they trade under a name which is the same or substantially the same as the company in liquidation without approval from the Court, they will be committing an offence under §216 of the Insolvency Act 1986 (and equivalent legislation in UK regions).