What are the differences between Creditors’ Voluntary Winding-Up and Members’ Voluntary Winding-Up?
CREDITORS’ VOLUNTARY WINDING-UP
The creditors’ voluntary winding-up is initiated by the directors and approved by shareholders and creditors of the company. An Extraordinary General Meeting (“EGM”) of shareholders and a creditors’ meeting be convened to resolve that the company be wound up within five (5) weeks from the lodgement of Declaration of Inability to Continue Business. The provisional liquidator is appointed at the board of directors’ meeting for the purpose of overseeing the affairs of the company thereafter until the holding of the EGM and the creditors’ meeting.
Where there is a difference between the company’s and the creditors’ nominee(s), the creditors’ choice of liquidator(s) will prevail over that of the Board of Directors’ and members’ nomination.
MEMBERS’ VOLUNTARY WINDING-UP
Members’ voluntary winding-up is initiated by the company’s directors and approved by the shareholders due to business environment, dormant status of the company and/or corporate restructuring involving a group of companies. Prior to initiating a members’ voluntary liquidation, it is imperative that the requirements of Section 443 of the Companies Act 2016 are complied with whereby the directors of the company are required to confirm the solvency position of the company and is able to pay all its debt in full within twelve (12) months from the commencement of liquidation.