Events which Form the basis for Voluntary Liquidation
On the expiration of the period fixed for the company's life term as prescribed in the company's constitutional documents;
On the happening of an event which will trigger liquidation as prescribed in the company's constitutional documents;
On the passing of a special resolution2 for the voluntary liquidation of the company.
Procedure for Commencement of Voluntary Liquidation
Directors resolve at a meeting or by written resolutions of all the directors to recommend to the shareholders that the company be would up and a liquidator appointed3. In preparation for liquidation the directors may (i) attend to the payment of all known debts (ii) attend to payment of dividends to shareholders; and (iii) provide a representation letter to the proposed liquidator regarding the company's affairs. This will simplify the liquidation process so that there are few assets and liabilities on the commencement of liquidation and result in greater time efficiency.
Shareholders of the company pass special resolutions approving (i) the voluntary liquidation of the company; (ii) the appointment of a liquidator; and (iii) the liquidator's remuneration. Liquidation is commenced on the passing of the shareholders' resolution for voluntary liquidation.
Effect of Commencement of Liquidation
The directors' powers cease and the Liquidator, as agent of the company, will undertake all responsibilities for the management of the company till its dissolution.
Any contractual obligations of the company remain in effect and proceedings may still be brought against the company.
