When we look at the meaning of company liquidation
we need to recognise that A company run the risk of being placed under liquidation if the entity is unable to pay the debt owed to creditors. The process is usually initiated by the directors, but can also be done by the creditors of the entity.
An entity usually applies for voluntary liquidation if the company's liabilities are more than its assets. This basically means that company cannot operate its business functions anymore and can apply for company liquidation.
Voluntary liquidation is a much more relaxed approach and this usually gives the company time to prepare for liquidation and to appoint a more favourable liquidator to assist with the liquidation process.
Compulsory liquidation is a much more aggressive style of going about liquidation and this is usually the case when a creditor demands the outstanding debt to be paid immediately.
If we look at a Close corporation or a CC in closer detail, we can determine that since the 1 May 2011 it is not possible to incorporate a cc in South Africa and CC's have been regulated by the Close Corporations Act. Close Corporations were generally created to accommodation smaller business that allowed anywhere from 1-10 members to be part of the cc.
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