The Difference Between a Voluntary and Compulsory Liquidation

A Company Liquidation is essentially the same if you decide to liquidate your company on a voluntary basis or the court appoints a liquidator.

However, the main difference between a liquidator appointed voluntarily and a court appointed liquidator is who gets to choose the liquidator.

A Creditors’ Voluntary Liquidation is when you voluntarily place the company into liquidation. In this scenario, you have the choice to appoint a liquidator of your own choosing.

This can be beneficial because then it means you are in control of who gets to oversee the liquidation. You can do research and confident in their abilities.

Being able to choose the liquidator can give you some confidence which you won’t get if you allow your creditors to take control of the liquidation process.

On the other hand, compulsory liquidation, or a Court initiated liquidation, is when the courts or the petitioning creditor nominates the liquidator and you don’t have any say in the matter at all.

Regardless of who appoints the liquidator, all liquidators must do their job professionally and report their findings to the creditors and act impartially.


Looking for an experienced and reliable liquidator that you can trust?

Australian Company Liquidations are all fully licensed and Investments Committee. We also run a toll-free advice line for those who are looking for free expert advice. If you would like a consultation with our experts then please call us on our 24/7 hotline on 1800 981 070.