Voluntary Liquidation

Voluntary liquidation is a process where a company decides to close down and sell off its assets to pay debts. This usually occurs when the owners believe the business can no longer operate profitably or is no longer viable. The process is initiated by the shareholders or directors, who appoint a liquidator to manage the sale of assets and distribute the proceeds to creditors. After debts are settled, any remaining funds are distributed to shareholders. Unlike compulsory liquidation, which is mandated by a court, voluntary liquidation is a consensual decision made by the company's stakeholders.