The Liquidation Process – it can be fast
Up until a few years ago, the process to appoint a liquidator was quite clunky. The law changed in 2010 and it has allowed us to streamline our systems – now we can get the appointment process in a Creditors Voluntary Liquidation done in a few hours. Well that’s the case for Dissolve anyway, maybe not others! After appointment, there is a lot of work the liquidator has to do, but the directors and shareholders don’t have to worry about most of that. I’ve explained below the full process of a Creditors Voluntary Liquidation and highlighted where the director and shareholders are involved.
Appointing a Liquidator (Day 1)
- Dissolve sends you an Appointment Pack by email;
- The Director(s) and Shareholders sign the standard resolutions and return them to Dissolve – you’ve appointed the Liquidator as soon as the last shareholder signs;
The days following appointment (Days 2 to 7)
- Dissolve lodges various appointment documents at ASIC and advises various government organisations, such the Australian Tax Office and state government revenue offices, of the appointment;
- Dissolve send the Director(s) a Post Appointment Pack;
- The Director(s) complete the Questionnaire in the Pack and deliver the books and records of the company to the Liquidator;
- The Liquidator collects and sells the remaining assets of the company.
The Creditors Meeting (Days 7 to 14)
- The Liquidator prepares a Creditors Report which advises creditors of the appointment and calls a Creditors’ Meeting;
- The Liquidator holds the Creditors’ Meeting – Dissolve always provides phone facilities so that creditors can phone-in rather than attend physically – it is no longer a legal requirement for a Director to attend the Creditor’s Meeting
The Liquidator’s tasks (Around 1 to 3 months)
- The Liquidator reviews the books and records and reports findings to ASIC;
- The Liquidator may commence recovery processes if he discovers any “hidden assets” or assets that should be recovered;
- If the Liquidator has funds available he will pay a Dividend to creditors
Finalising the liquidation (A further 3 to 4 months)
- The Liquidator will prepare a Final Report for Creditors;
- The Liquidator will lodge various documents with ASIC and request that ASIC deregister the company.
Yes, there can be variations from the above but the above is accurate for around 80% of liquidations done by Dissolve.