Creditors' voluntary liquidation (or creditors' voluntary winding up) - this is when the shareholders of a company decide to put the company into liquidation, but there are not enough assets to pay all the creditors, i.e. the company is insolvent.
To vote for a voluntary liquidation, the shareholders must:
• hold a general meeting of the company; and
• pass a resolution for voluntary winding up
The Liquidator takes control of the company's affairs and almost all powers of the directors cease.
The liquidator disposes of all the company's assets and, after paying the costs and expenses of the liquidation, distributes any remaining money to the creditors.
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