Court Liquidation
Understanding Court Liquidation: A Legal Winding-Up Process
A Court Liquidation occurs when a Liquidator is appointed by the Court to wind up (liquidate) a company. A Court Liquidation is commonly instigated by a creditor that has made an application to the Court to liquidate the company due to unpaid debt. In addition, company directors, shareholders and the Australian Securities and Investments Commission are also able to make an application to the Court to liquidate a Company.
This is a key difference between a Creditors’ Voluntary Liquidation and a Court Liquidation; whereby an application is submitted to the Court. The most common of the two is a Creditors’ Voluntary Liquidation. The role of the Liquidator is much the same in both liquidation processes. The Liquidator’s purpose is to take control of the company and wind up its affairs in an orderly and fair manner to creditors.
It is important to know that if you have unpaid tax debt, the ATO may take recovery actions against your company. This may result in your company being liquidated through an application made to the Court.
If you have company debt and you are unsure of your options, contact our friendly team today for a free confidential consultation.
What is liquidation?
Liquidation (or winding up) is a term used when a company is being wound up. There are three types of Liquidation:
- Creditors’ Voluntary Liquidation – insolvent winding up initiated by the Company,
- Court Liquidation – insolvent winding up initiated by a creditor
- Members’ Voluntary Liquidation – solvent winding up
Frequently Asked Questions
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When faced with business financial stress, we know things can be daunting. However, under the circumstances you may want to continue trading but don’t know how. Alternatively, you may want to wind up your business affairs or you may just need some advice.
Insolvency Options are the experts you can turn to when you need help.
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