Liquidation Services

ABR Liquidation Services is a specialist division providing winding up services on behalf of Directors, Shareholders and Creditors.

For Directors and Shareholders, the winding up process is commenced by Voluntary appointment of a Liquidator. We prepare and provide the necessary Resolutions and Forms to initiate a Voluntary winding up.

For Creditors, the appointment of a Liquidator to wind up the Company is commenced on application to the Court. The winding up is known as an Official Liquidation or Court Liquidation.

Other than the manner in which the winding up is commenced (Voluntary or Court), the role of the Liquidator is the same.

As Liquidators we are tasked with securing and realising the assets of the Company for the benefit of Creditors, and investigating the Company’s affairs with a focus on why the Company failed and what, if any transactions of the Company are reversible for the benefit of Creditors.

Voluntary Liquidation
(insolvent winding up)

A voluntary liquidation is a winding up of a Company initiated by the Company’s directors and shareholders. A view is formed by the directors and shareholders that the Company is unable to pay its debts as and when they fall due and is unlikely to recover from that position in the foreseeable future.

The effect of a Voluntary Liquidation is that the Directors discharge their duties at law by taking appropriate steps to deal with the insolvency of the Company by taking the necessary step to have the insolvent Company wound up. A winding-up will crystalise all of the debts of the Company and no creditor for any liabilities owed can take any recovery action against the Company without the Liquidator’s consent or leave of the Court.

The role of the Liquidator is to identify and sell all of the Assets of the Company for the benefit of Creditors, subject to Liquidation costs. The Liquidator also investigates the failure of the Company and whether in the ordinary course of business outside of the control of the directors or whether for some other reason. That some other reason may give rise to a claim by the Liquidator against third parties if those third parties have received a financial benefit outside the ordinary course of business which should otherwise been available for the benefit of creditors in the Liquidation.

A Liquidation process can take anywhere from 6 to 9 months to complete, and longer if there are larger complex matters to resolve.

At the end of the process, a dividend is paid to Creditors out of surplus asset or transaction recoveries and if less that 100 cents in the dollar, creditors remaining debts are written off and the Company is deregistered.

Court Liquidation
(insolvent winding up)

Similar to a Voluntary Liquidation, a Court Liquidation is a winding up of a Company, but it is one that is initiated by a Creditor who is owed money, or by Shareholders in dispute and concerns around the security of assets or the integrity of the financial position of the Company.

A Creditor or Plaintiff can make an application to Court on the basis of insolvency of the Company or other concerns and if justified, the Court will make an order to wind up the Company.

The role of the Liquidator in a Court Liquidation is the same as the role of a Liquidator in a Voluntary Liquidation.

Members Voluntary Liquidation
(solvent winding up)

A Members Voluntary Liquidation is a solvent winding up of a Company where the Company will be able to pay out all of its debts within 12 months.

A Liquidator is appointed to the solvent Company and a Declaration of Solvency is signed and lodged by the Directors of the Company.

The role of the Liquidator is then to sell all of the assets of the Company and secure all realisation proceeds for distribution to Creditors in full, and then to Shareholders in accordance with their Share Rights.

The benefits of a Members Voluntary Liquidation

  • A distribution to Shareholders from Pre-CGT (Capital Gains Tax) Assets or Reserves will retain their CGT exempt status and be tax-free in the hands of Shareholders. Without the Members Voluntary Liquidation process, the distribution would be taxed as ordinary income in the hands of the Shareholders.
  • Any profits subject to the small business CGT concessions retain their character when distributed by a Liquidator in a Members Voluntary Liquidator. They are otherwise taxed as ordinary income in the hands of the Shareholder.
  • Any disputes to entitlement to funds in the Company can be dealt with by an independently appointed Liquidator, who would be guided by, at a minimum, the Corporations Act 2001, the Company’s Constitution and Articles of Association and any Shareholder Agreements.


A Liquidator gets paid out of Assets Realised through the Liquidation. A Liquidator’s fee for carrying out necessary and proper tasks in a Liquidation is subject to the approval of Creditors at a Meeting of Creditors. A Court may also approve a Liquidator’s fee. Creditors have the right to vote against a Liquidators fee, or challenge a Liquidator’s fee by application to the Court.

In the event a proposed Voluntary Liquidation has no Realisable Assets, a Liquidator will seek an indemnity payment from the Director/s of a lump sum estimate to undertake the Liquidation. The Liquidator should demonstrate to the Director/s how the lump sum estimate is made up.

In a Court Liquidation / Official Liquidation, only an Official Liquidator can be appointed. An Official Liquidator is an Officer of the Court and accepts Official Liquidation appointments as an Officer of the Court, and is obliged to carry out his/her duties as a Liquidator accordingly with or without Realisable Assets in the Liquidation. Often Companies that end up being wound up through the Courts are not trading and have no Assets, and unless there are specific transactions that can be recovered by the Liquidator for the benefit of creditors, an Official Liquidator does not get paid.

If you have a business operating under a company, or a company that previously operated a business, and the company has debts that are due but that it cannot pay, the company is insolvent and you may need to have a liquidator appointed. There are alternatives however to liquidation if your business is an otherwise viable business, and it may be able to be restructured or rescued if it means saving the business.

A liquidation of the company is a process available in circumstances where there is an action being commenced or pursued against the company and the company does not have sufficient cash or other asset resources to fund a defence or pay a claim if successful against the company. A liquidation process could bring an end to the proceedings if there is no commercial benefit to the plaintiff in continuing to pursue the claim. Alternatively, the Company and the potential legal liability could be restructured through a Voluntary Administration so that the business is able to survive the legal action.

Once a company is placed into liquidation the claims of creditors are crystallised in the liquidation and become debts of the company that are provable in the liquidation and entitled to rank for a distribution in full or in part if sufficient recoveries are made to enable a return to creditors. If there are no assets and no other recoveries available the creditors' debts are written off at the end of the liquidation.

In a Liquidation, employees are entitled to be paid in priority to all other creditors and in priority to secured creditors like banks from the realisation of a class of assets referred to as floating or circulating assets. These typically are assets that can be converted into cash fairly easily, such as cash at bank, stock and debtors. In the event that a company in liquidation realises no assets to make any distribution to creditors, the government's Fair Entitlements Guarantee (FEG) scheme is administered during the liquidation to ensure employee entitlements (except unpaid superannuation and sick leave) are paid. The FEG scheme provides an advance of monies to a Liquidator for the payment of outstanding employee entitlements.

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