What is liquidation?
A business may be liquidated if the owners decide to cease operations, or there is a cash short-fall and the entity is unable to pay creditors.
Liquidation involves drawing to a close all of a company’s dealings, so that the business operations can be shut down. Assets are turned into currency, and subsequently used to settle any liabilities. Once all creditors’ debts etc. have been settled, the remaining money, if any, is disbursed to stakeholders of the business.
Who is a liquidator?
A liquidator is an accountant who is specifically skilled in the liquidation process – these are the people that will carry out the liquidation of your company. They must be either registered with ASIC or the Courts.
Important liquidation notes:
- During the liquidation process, a company can still operate; though only if the liquidator deems it in the best interest of creditors
- The liquidation process has no time limit – it will go for however long it is required.
- The liquidation process is over once: it’s no longer on ASIC’s company register; there is a court order to dissolve the company – brought about by the liquidator; or the court stops/settles the closing down of the entity.
Do you need liquidation advice?
Don’t hesitate, contact our liquidation lawyers today to arrange a consultation. Submit your online enquiry or call 02 9223 9166.