As the term suggests, a solvent liquidation is the liquidation of a company that is not insolvent. It is typically a formal wind down of a company where all debts and claims have been met. The directors of the company are required to sign a solvency resolution confirming that the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities. The company must also have ceased trading.
It is important also to note that although there is no absolute restriction on a prior professional adviser acting as a liquidator of a solvent liquidation except where that adviser is a creditor or an auditor in the preceding two years, a liquidator must ensure that there are no conflicts of interests.