If a liquidator suspects that people involved with the company may have committed offences and the liquidator reports this to ASIC, the liquidator may also be able to apply to ASIC for funding under the Assetless Administration Fund to carry out a further investigation into the allegations.
A liquidator may call a creditors’ meeting from time to time to inform creditors of the progress of the liquidation, to find out their wishes on a particular matter or seek approval of the liquidator’s fees.
At this meeting the creditors vote to appoint a liquidator. So, this is why it’s called Creditors Voluntary Liquidation.
It’s very common, quick and a very powerful way to close a business and deal with things properly.
If the company is without sufficient assets, one or more creditors may agree to reimburse a liquidator’s costs and expenses of taking action to recover further assets for the benefit of creditors.
In this case, if additional assets are recovered, the liquidator or particular creditor can apply to the court for the creditor to be compensated for the risk involved in funding the liquidator’s recovery action.
Accountants or solicitors can provide further information about options for insolvent companies. The assets are collected and sold for the benefit of the company’s creditors.
All other possible liabilities, like employment or renting a property, are stopped.
It really is the end of the company, but the “business” may survive.
The assets are collected and sold for the benefit of the company’s creditors.
From the date of liquidation the liquidator takes custody and control of all the company’s unsecured assets and assists secured creditors where necessary.