IVA Glossary
V
Voluntary Liquidatio
The term "Voluntary Liquidation" refers to the situation when a company is placed into liquidation by determination of its members. The winding-up or the liquidation of the company in question starts from the date after which the resolution is passed. Generally speaking, the company in question ceases to continue its operations, so it will no longer carry on business.
Two types of voluntary liquidation exist: one is the members' voluntary liquidation, and the other is the creditors' voluntary liquidation.
In case the company in question is solvent, as well as its members have made a declaration of solvency, voluntary liquidation means the members' voluntary winding-up, when the general meeting has to appoint the liquidator or liquidators.
If the company is not solvent, the liquidation has to proceed as the creditors' voluntary liquidation, where a creditors' meeting has to be called. The directors must report the company's affairs to this meeting. If a voluntary liquidation works through the creditors' voluntary liquidation, a so-called liquidation committee might be nominated.
If a company's voluntary liquidation has begun, this does not prevent the implementation of a compulsory liquidation, but for this to come into force, the petitioning contributory must prove the court that the voluntary winding-up would damage the contributories.
Two types of voluntary liquidation exist: one is the members' voluntary liquidation, and the other is the creditors' voluntary liquidation.
In case the company in question is solvent, as well as its members have made a declaration of solvency, voluntary liquidation means the members' voluntary winding-up, when the general meeting has to appoint the liquidator or liquidators.
If the company is not solvent, the liquidation has to proceed as the creditors' voluntary liquidation, where a creditors' meeting has to be called. The directors must report the company's affairs to this meeting. If a voluntary liquidation works through the creditors' voluntary liquidation, a so-called liquidation committee might be nominated.
If a company's voluntary liquidation has begun, this does not prevent the implementation of a compulsory liquidation, but for this to come into force, the petitioning contributory must prove the court that the voluntary winding-up would damage the contributories.
