1. Voluntary Liquidation
The company, through its directors and shareholders, can initiate liquidation proceedings. This is typically done when all parties agree that liquidation is the best course of action.
– Requirement: A Special Resolution signed by all directors and shareholders
2. Creditors Liquidation.
When a company fails to pay its debts, creditors have the right to force liquidation.
– Process: Filing a liquidation application with the High Court
3. Individual Directors or Shareholders
In cases of internal disagreement, individual directors or shareholders can apply for liquidation.
– Scenario: When not all directors or shareholders agree on liquidation
– Process: High Court application against the company
Compulsory of Voluntary Liquidation
A company can be liquidated voluntarily by the directors AND shareholders or by force (compulsory liquidation), also by directors or shareholders and also by creditors.
When the company's leadership agrees on liquidation, they can choose from:
When the company’s leadership agrees on liquidation, they can choose from:
a) Members’ Voluntary Liquidation
– Filed at CIPC
– Suitable for solvent and insolvent companies
b) Creditors’ Voluntary Liquidation
– Filed at CIPC
– For insolvent companies
c) Voluntary Court Liquidation
– Filed at the High Court under Section 344 of the Companies Act
– Typically used when the company is unable to pay its debts
– The Company can be liquidated either at the High Court or at the CIPC
The CIPC
– CIPC (Companies and Intellectual Property Commission):
Handles voluntary liquidations where all parties agree.
The High Court
Oversees forced liquidations and resolves disputes in the liquidation process.
