Every day thousands of businesses are either launched or shut down all over the world. Not all companies can boom or see profit throughout their life. There are times when some companies have to call it off due to financial difficulties and file for bankruptcy. However, bankruptcy is the last resort for all companies, before that they try all means to overcome financial difficulties.
Bankruptcy is considered as last option because it destroys the credit score and reputation of the company’s director. Company’s director takes professional advice till he isn’t sure that it is time to call it off. They can take advice of insolvency consultant to properly asses the financial condition of the company before coming to a decision. Even if consultant advices that the company isn’t in a good condition, still they have to suggest appropriate way of winding up company, which is voluntary liquidation.
Voluntary liquidation (VL) is a process where shareholders give consent to director to close or dissolve the company. The role of VL is to terminate all operations of business, including financial affairs, pay back creditors and disassemble corporate structure. This isn’t similar to compulsory liquidation, because that happens with the order of court, but in voluntary liquidation business management decides that company can’t afford to run anymore due to financial difficulties.
Every country and state has their own rules of liquidation. The decision of company liquidation Sydney, Australia is done only after the meeting of board of directors where they all come to mutual consent and when it’s lodged in ASIC before the shareholders’ meeting is held. After the meeting, company should wind up business in 5 weeks of time period. Thus, you need to hurry within this time frame. At least 95 percent of shareholders need to agree to dissolve company.
The Insolvency Experts provide liquidation as well as insolvency services at low cost all over Australia. It is the first company to provide free helpline service which is available 24/7. They provide proper advice to companies and directors who’re in financial stress. The company has been in business for more than 30 years, which means their experience in this filed can be counted.
Here are three things to remember about voluntary liquidation –
- Voluntary liquidation is a process which is taken into action before things got worse. In this process, the company’s assets are sold off to settle all debts and financial burdens.
- The purpose is to derive maximum cash from a business which will have no future and cans hut down anytime by court.
- This liquidation can occur only when maximum shareholders vote for it along with board of members. It has got nothing to do with any regulatory body or court.
Under the voluntary process –
- The director is suspended from its position.
- A liquidator is appointed for forensic examination of transactions, company, and acts of director and all officers.
- Liquidator becomes the officer who takes command of company and its properties.
- The director’s role isn’t over yet. He or she has to submit a complete financial report of the company for analysis.
- Proper help should be provided to liquidator in terms of records, books, ledgers, time to time.
If other alternatives are available for the company, one should try to go for it. Liquidation should be last thing to consider. A company supports economy of many families, therefore simply liquidating it will destroy many careers and life. Think personally and professionally if voluntary liquidation is finest decision.