Bussiness Advice
Categories of business liquidation
Business liquidation falls into three main categories: ‘member’s voluntary liquidation’, ‘creditors’ voluntary liquidation’ and ‘compulsory liquidation’. Members’ liquidation occurs when the assets of the company outweigh the debts meaning that the company is solvent therefore the liquidation is as a result of member’s agreement. Creditors’ liquidation is almost similar to the members’ liquidation but in this case, the company’s assets are less than the debts hence the company is insolvent. Finally compulsory business liquidation occurs through a court order. A receiver is appointed by the court to oversee the process of evaluating and liquidating the assets. Since business liquidation is not the best route for a business to take, the business owner is advised to seek assistance from a professional debt adviser who can offer a solution to stop the impending closure of the business. If the liquidation cannot be avoided the debt adviser will recommend the best liquidation companies to ensure the process will produce positive results and that it is completed quickly.