Liquidation Options For Insolvent Companies
Summary
Voluntary liquidation is initiated by shareholders and can be either members or creditors voluntary liquidation, depending on solvency. Compulsory liquidation is court-ordered, usually by creditors. Voluntary liquidation offers more control and can be quicker, while compulsory liquidation involves court processes and can be more costly. ZED Tech Ltds shareholders should evaluate their control and resources for voluntary liquidation or consider compulsory liquidation if necessary. Solvent companies can meet financial obligations, while insolvent ones cannot.Full Conversation
Whats solvent and insolvent
Sure, let's define the terms:
- Solvent: A company is solvent if it can meet its financial obligations and pay its debts as they come due.
- Insolvent: A company is insolvent if it cannot pay its debts when they are due and its liabilities exceed its assets.
For ZED Tech Ltd, since it's insolvent, the shareholders need to decide between voluntary liquidation, where they have more control, or compulsory liquidation, initiated by creditors through the court. Do you need further guidance on this?