Which type of liquidation occurs when the company is solvent?

Members voluntary liquidation occurs when a company is solvent, meaning it can pay its debts as they fall due. In this process, the members (shareholders) of the company typically appoint a liquidator to wind up the company’s affairs voluntarily. This form of liquidation is characterized by the company's ability to settle its obligations and distribute any remaining assets among its members after all debts have been repaid.

In contrast, creditors voluntary liquidation occurs when the company is insolvent and unable to pay its debts. It is initiated by the company itself but involves creditor interests heavily influencing the process. Compulsory liquidation, on the other hand, is initiated by a court order and usually results from a petition by creditors, often due to the company's inability to meet financial obligations.

Therefore, members voluntary liquidation is specifically designed for solvent companies, setting it apart from the other types, which are associated with insolvency. This distinction is critical for understanding the legal framework around company liquidations in the context of corporate and business law.