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Wind up the affairs of an insolvent company by way of an application to the court. The most common reason that a company is wound up by the court is because it has failed to comply with the demands of an unsecured creditor. Benefits include:

• Provides a mechanism for creditors to wind up companies who have not paid their debts
• The Official Liquidator takes possession and control of the company's assets for the purpose of realising the maximum amount for creditors
• Investigates the company's affairs to determine if there are any further assets to be realised or any recovery actions that may be commenced.

When the shareholders of the company realise that it is insolvent, they resolve a special resolution to appoint a Liquidator and placing the company into Liquidation. Benefits include:

• Finalising the company’s affairs immediately
• Possible crystallisation of tax losses
• Efficient and cost effective way of winding the company up.

A members voluntary liquidation is the winding up of a solvent company whereby all outstanding creditors are paid in full and surplus assets are distributed to the members of the company. Benefits include:

• Cleaning up complicated group structures and/or dormant companies no longer required that are incurring unnecessary and costly ongoing annual compliance costs
• Specific tax provisions and capital tax regimes available to liquidator proving advantageous for shareholders
• Return capital to shareholders and finalise the company's affairs

A creditor that holds security such as a fixed and floating charge or equitable mortgage may appoint a Receiver and Manager ("Receiver"), who will assume control of the company's assets and/or business and realise them in order to satisfy the claim of the secured creditor. Generally, the secured creditor is a private finance company, bank or financial institution. The Receiver is not required to pay any debts due to creditors from the company prior to the appointment and does not declare dividends to unsecured creditors.

The main purpose of a voluntary administration is to provide a company with a viable alternative to winding up where there is scope for restructuring its financial affairs. Benefits include:

• A proactive way for the director to deal with a financially stressed company;
• It is fast and flexible and can provide solutions which are not possible or practical under other forms of external administration;
• Possibility of returning the business back to the director.