Definition: is a business liquidation process that has been initiated by the board of directors of a company after they’ve issued a special resolution stating such a desire. This procedure has two basic types: a) directors voluntary winding up, during which the management makes a declaration of the company’s solvency within a month before the resolution is adopted. Such a declaration must include a statement that the company can pay off all of its debts within a year after the liquidation, and has to be accompanied by a statement containing the organization’s assets and liabilities, and b) creditor’s voluntary winding up, during which a declaration isn’t required, but instead a meeting of creditors takes place where the management has to submit a statement with its assets and liabilities to them. In both scenarios, directors lose their powers after they or the creditors appoint a liquidator.
In a Sentence:
After the news that Ion Port has begun the voluntary winding up process, their creditors were relieved that the company can pay off its debts before they close down.
We’ve decided to start the voluntary winding up process and will start preparing the appropriate statements next week. Thankfully, the court won’t be able to meddle with our affairs, as we’ll handle everything ourselves.
Synonyms and related words: winding up, voluntary liquidation, compulsory winding up, liquidation