Types of liquidations

Normally, business liquidators advise that a company stops all its operations before they can start their work. In other words, the company does not trade or manufacture and all its core functions are stopped. The reason why a company has to cease during this process is to stop it from accumulating additional debt. There are generally three types of liquidation options available to a company.

The first type is called members voluntary liquidation. Here, the debt that a company has is much less than the assets of the company. The company is still very solvent.

Creditor’s voluntary liquidation is the second type. There is no difference between this type of liquidation and the member’s voluntary liquidation. The only difference is that in this case the debts of the company far outweigh its asset. The business is insolvent.

Finally, there is compulsory liquidation where the court orders that a company be put under liquidation.

It does not matter which type yours is but you have to deal with business liquidators because doing it by self would be a lot harder.