Companies in difficulty

What is liquidation also called ?

Winding Up

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What types of liquidation is there ?

Voluntary (simpler, cheaper + quicker) or compulsory i.e. ordered by court

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What must a company be for a member's voluntary liquidation ?

Solvent

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What must a liquidator be qualified as ?

qualified insolvency practitioner

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What is a liquidator ?

Appointed to take over running the company, takes over the directors

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For a creditors voluntary liquidation the company with be insolvent or solvent ?

Insolvent

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What resolution is used for members voluntary liquidation ?

Special resolution (ordinary if articles provide for liquidation. unusual)

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What resolution is used for creditors voluntary liquidation ?

Special resolution, PLC or private company, or written resolution with 75% majority (private company only)

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Who must declare the statutory declaration of solvency ?

Directors

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What does the statutory declaration of solvency set out ?

Sets out that company will be able to meet its debts in full

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For the members voluntary liquidation who appoint a liquidator ?

Members appoint liquidator

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What does the liquidator do for the members of voluntary liquidation ?

Realises company assets. pays debts and distributes surplus to members.

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If there is no reasonable grounds for the statement what could happen to the directors ?

Get fined or inprisioned.

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Who approves the liquidator action for members voluntary liquidation ?

Members in GM

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What are the completion steps for members voluntary liquidation ?

Liquidator calls meeting of members + sends copy of final accounts to Registrar who dissolves company within 3 months.

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How is a liquidator appointed for creditors voluntary liquidation ?

Directors call GM to appoint liquidator

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Who calls the creditor meeting for creditors voluntary liquidation ?

Directors.

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Who can overrule whos choice of liquidator for creditors voluntary liquidation ?

Creditors can overrule members

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How many creditors are involved in the liquidation committee for the creditors voluntary liquidation ?

5 creditors and 5 members, creditors have control

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Who approves the liquidators actions for creditor voluntary liquidation ?

Liquidation committee

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In completion of the creditors voluntary liquidation what happens

Liquidator calls meeting of members + creditors + sends copy of final accounts to Registrar who dissolves company 3 months later.

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What are the 5 reasons for compulsory liquidation (controlled by court) ?

Company unable to pay its debts, just + equitable to do so, company passes special resolution, plc fails to obtain S.761 certificate within 1 year of incorporation, company hasn't commenced business within 6 months of incorporation

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Who can make a written demand for the debt to be settled ?

Any creditor or creditors owed at least £750

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How many days do the company have before the creditor can apply to the court to have the business wound up ?

21 days

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What other reason would the creditors apply to the courts to have the company wound up ?

if they obtain judgement against company for debt but has not received payment.

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Companies in difficulty

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