Liquidating limited

28-Sep-2019 17:31

The process is initiated by the company but the choice of liquidator and control of the liquidation rests with the creditors, hence the name Creditors' Voluntary Liquidation.

In most cases the liquidation process will return only a proportion of the sums due to creditors, on their claims against the company, and will not return any funds to the shareholders.

Assuming that the sale of the final plot goes through without problems the balance sheet of Tejoori looks as follows: As you can see, the company has only cash remaining on the balance sheet together with some receivables and some small liabilities.

The “other receivables” are related to an earlier sale of some assets, but apparently the acquirer has so far been unwilling to settle the remaining amount.

A change in legislation or increased competition may make a previously profitable company no longer viable.

The liquidation commences at the time of passing the resolution.

No director or business owner wants to put their company into insolvent liquidation however the Creditors' Voluntary Liquidation allows them to move on from a failing business.

It is important to recognise when a company is continuing to trade without reasonable prospect of avoiding insolvent liquidation.

Upon the completion of the liquidation, the company goes into dissolution and it ceases to exist.

The purposes of a liquidation are: Just distribution of assets When a company is being wound up, the company’s business ceases to operate and its assets and affairs are handed over to an independent liquidator whose powers, duties and functions are regulated by the Companies Act (Cap 50).

The liquidation commences at the time of passing the resolution.

No director or business owner wants to put their company into insolvent liquidation however the Creditors' Voluntary Liquidation allows them to move on from a failing business.

It is important to recognise when a company is continuing to trade without reasonable prospect of avoiding insolvent liquidation.

Upon the completion of the liquidation, the company goes into dissolution and it ceases to exist.

The purposes of a liquidation are: Just distribution of assets When a company is being wound up, the company’s business ceases to operate and its assets and affairs are handed over to an independent liquidator whose powers, duties and functions are regulated by the Companies Act (Cap 50).

In conjunction with the other provisions of the Bankruptcy Code that require a disclosure statement and plan to provide “adequate information” for a claim or interest holder to make an informed judgment about the plan, Section 1123(b)(3) effectively provides notice to creditors of retention and prospective enforcement of claims that may enlarge the estate’s assets for distribution.