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Members of a solvent company may decide to
wind-up a solvent company pursuant to the
Corporations Act 2001 (Cth).
Alternatively, a decision may be made to
deregister the company. De-registration
can only take place where all members of the
company agree to deregister, the company is not
carrying on business, the company's assets are
worth less than $1000, the company has paid all
fees and penalties payable under the Act, the
company has no outstanding liabilities, and the
company is not a party to any legal
proceedings.
In the event that a decision is made to
wind-up, the directors must make a written
declaration that they have made an inquiry into
the affairs of the company and that at a
meeting of directors they have formed the
opinion that the company will be able to pay
its debts in full within twelve months after
the commencement of the winding-up. This
is often called a solvency declaration.
After the solvency declaration, there must be a
special resolution. This requires at
least 21 days notice and a 75% majority of
eligible voters who vote at a meeting.
Where the company has been under no other
form of external administration, the winding-up
commences formally from the time of passing the
special resolution. The advantage of
members voluntary winding-up is that the
members can choose the liquidator, fix their
remuneration, and in general terms supervise
their conduct.
In the case of a proprietary company, the
liquidation can be carried out by a person who
is not a registered company liquidator.
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