Liquidation, or winding up, is a procedure by which a corporation is ultimately dissolved. Generally, upon liquidation, the liquidator takes complete control of the corporation from the directors. The objective of a winding up is to bring about an end to the corporation in an orderly and equitable manner which obtains the maximum return possible for creditors and members. The main tasks of a liquidator during the winding up are to:
- investigate the corporation's financial affairs and prepare a report on those affairs (including possible recovery actions available to the corporation);
- call in and realise the corporation's assets (including, where appropriate, bringing actions to recover assets which have been disposed of improperly); and
- distribute the proceeds to creditors who properly prove their claims in the priority set down in the Corporations Law.