Differences between voluntary liquidation and Court ordered liquidation

Voluntary liquidation

Shareholders may place their company into voluntary liquidation.

This involves the shareholder(s) passing a special resolution appointing a liquidator to wind up the company’s affairs.  A liquidator is usually a chartered accountant who has experience in the investigation of a company’s financial affairs and the sale of company assets and interests for the benefit of company creditors.

The Official Assignee cannot be appointed liquidator in cases of voluntary liquidation unless the shareholder is bankrupt and the Official Assignee is passing a special resolution as part of the bankruptcy administration.

Court-ordered liquidation

Creditors may take the step of applying to the High Court to place a company into liquidation.  The Court will make a determination based on submissions made by the creditor and the company about non-payment of debts.  If the company is not in a position to pay the debt or enter into an arrangement to pay, the Court may place the company into liquidation.

The Court can either appoint a private liquidator (such as a suitably qualified chartered accountant) selected by the creditor or the Official Assignee as liquidator.