The rights of unsecured creditors over the company's assets are virtually "frozen" upon the commencement of the liquidation to avoid a further deterioration of the company's financial position and proliferation of its liabilities.
NEW March 2016 – Complete Guide to Creditors Voluntary Liquidation – 50 page PDF free to download He or she runs the liquidation, fills out all the forms, calls all meetings and investigates the conduct of the directors before the liquidation. He then works out the debts and pays the creditors from the assets, if there were any.
Overview Liquidation is a process where the company’s assets are seized and realised, with the resulting proceeds used to pay off its debts and liabilities.
Any surplus is then distributed among the contributories of the company according to their rights and interests, or otherwise dealt with as the constitution of the company directs.
Upon the completion of the liquidation, the company goes into dissolution and it ceases to exist.
The purposes of a liquidation are: Just distribution of assets When a company is being wound up, the company’s business ceases to operate and its assets and affairs are handed over to an independent liquidator whose powers, duties and functions are regulated by the Companies Act (Cap 50).