The two available types of liquidation are:
- liquidation by the court (compulsory liquidation)
- voluntary liquidation instigated by the directors, the members or the creditors
Voluntary liquidation is split into:
- Members voluntary liquidation: and
- Creditor's voluntary liquidation.
It is important to recognise that not all liquidations are insolvent liquidations. There are many differences between these procedures however they are designed to achieve the same end result; to collect and distribute the assets of the company. When liquidation comes to an end the company may be dissolved and will no longer exist as a commercial entity.
Legislative provisions for liquidation of registered company are found in Part IV of the Insolvency Act 1986 and Part V for unregistered companies.
The rules for winding up are contained in the Insolvency (Scotland) (Receivership and Winding up) Rules 2018.