Liquidation of a company can be either voluntary or mandated by the court. Voluntary liquidation is initiated by the company’s directors and requires the approval of the company’s shareholders. There are two types of voluntary liquidation: members’ voluntary liquidation and creditors’ voluntary liquidation. To qualify for members’ voluntary liquidation, the company must be solvent and have unanimous consent from both the board of directors and the shareholders. In a members’ voluntary liquidation, the company’s assets are liquidated and the proceeds are divided amongst the company’s creditors and its owners.
