VOLUNTARY LIQUIDATION PROCESS

The voluntary liquidation process refers to a process where either the members of a company of the creditors of a company liquidate the company by consent.

The objective of the creditors and the debtor in this instance is exactly the same.  Opposite to this process, there is a so-called compulsory liquidation process.  In layman’s terms, this method is referred to a “hostile liquidation process”.

Should a creditor want to bring a hostile liquidation against your company he must in terms of the old companies Act 61 of 73 prove to Court that your company is insolvent, along with a long list of other formalities.  It is interesting to note that the new Companies act of 2008 stipulates that, as far as it pertains to the liquidation process the stipulations in the old companies act is still applicable.

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