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Definition

Where a company decides to enter liquidation without being forced to do so by its creditors. In terms of sections 79 to 83 of the Companies Act (71 of 2008) a company can be taken into liquidation voluntarily or be compelled to liquidate by its creditors. Section 80 of the Act says that for a voluntary liquidation to happen a special resolution of its shareholders is required. It is sometimes better for a company to enter liquidation voluntarily, but today most stressed companies opt to enter business rescue.

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