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Creditors Voluntary Liquidation Vs. Members' Voluntary Liquidation
The purpose of each is very different, although they are both done voluntarily, and used for various reasons.
A Members’ Voluntary Liquidation is for solvent businesses, and Voluntary Liquidation is for insolvent companies.
With a Members’ Voluntary Liquidation, the proceeds of sale go to the shareholders, whereas with a Creditors Voluntary Liquidation, the proceeds for the purchase of assets go to the creditors.
Once the director(s) and shareholders have opted to close down the business, we recommend that a licensed insolvency practitioner assess the business’s financial position.
Neither of these options should be mistaken for a Compulsory Liquidation, remember this is where a creditor (secured or unsecured) has taken legal action against your company.
Company Money Worries are here to guide and support your business and whether a Voluntary Liquidation is right for your business.
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