Solvent Voluntary Liquidation (Director) - Insolvent Voluntary Liquidation (s 241(2)(a))

The Process at a Glance: First, the board audits the company's financial position, verifies PPSR registrations, and identifies secured creditors. Once insolvency is established, the board obtains written consent from a licensed liquidator. The shareholders then pass a special resolution to appoint the liquidator. Following the appointment, the liquidator files notices with the registry, publishes public notices, and takes control of company assets. Directors must deliver the books, records and documents of the company that the liquidator requires by written notice (s 261 of the Companies Act 1993); failing to comply is an offence (s 261(6A)).

Key Legislation and Case Law: Governed by Section 241(2)(a) of the Companies Act 1993. Crucial considerations include the director liability provisions for reckless trading under Section 135 and obligations under Section 136. The liquidator's powers to demand information are set out in Section 261, with strict criminal penalties under Section 261(3) for non-compliance.

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