Companies in difficulty

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  • Created by: Lucy
  • Created on: 22-07-15 17:03
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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Other cards in this set

Card 2

Front

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

Back

What types of liquidation is there ?

Card 3

Front

Solvent

Back

Preview of the back of card 3

Card 4

Front

qualified insolvency practitioner

Back

Preview of the back of card 4

Card 5

Front

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

Back

Preview of the back of card 5
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