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Finance Dictionary and Glossary of Investment Terms
voluntary liquidation
Definition 1.
A liquidation that is supported by a company's shareholders, as opposed to an involuntary liquidation forced by Chapter 7 bankruptcy. A voluntary liquidation can occur in two situations. One is a members' voluntary liquidation when the directors of a solvent company decide to liquidate the company (with shareholder approval), and declare that they will be able to fulfill all creditor obligations in 12 months. The other situation is a creditors' voluntary liquidation, when the directors approach an insolvency professional for assistance in liquidation since they will not be able to fulfill creditors' obligations.
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Definition 2.
Liquidation proceedings that are supported by a company's shareholders.
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