Voluntary Liquidation

When a company is solvent but there is no further purpose for it it may enter into voluntary liquidation. This means that a number of forms need to be filed at ASIC but essentially the company simply shutting down and it will pay all of its creditors before this occurs.

What forms need to be filed?

The first form to file is the Form 520 Declaration of solvency. This must be lodged before the special resolution for the winding up of the company is sent out to the shareholders. It is a statement by the directors that the company will be able to pay all of the debts which fall due in the next twelve months. The special resolution must be passed within 5 weeks of the declaration of solvency.

The next form to file is the form 204 which needs to be lodged at ASIC 7 days after the passing of the special resolution for the winding up of the company. You also need to attach a copy of the special resolution for the winding up of the company.

Next is the 505 which is the notification of the appointment of an external administrator (liquidator). This must be lodged within 14 days after their appointment. Then in a timely manner (within 6 months of appointment) the liquidator must lodge the Form 524 Presentation of accounts and statements and then the Form 523 Notification of final meeting convened by liquidator and they need to lodge the form within 7 days of the final meeting advertised in the Australian Business Gazette. Then the company is wound up and de-registered.

This is the process of voluntary liquidation.

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