5.8 Conclusion of liq

Question 1

How is a liquidation concluded?

Answer 1

Obligation to produce a final account
 MVL: Members receive a draft final account 8 weeks prior to the filing of the final account
 Insolvent liquidations: Creditors have 8 week challenge / objection window

After 8 weeks final account and notice to
CH in all cases, plus
Comp liq - also court

Liquidator released from office
 Discharged from all liability in respect of their acts or omission
 EXCEPT: Any liability for misfeasance under s212 whilst in office

Question 2

What is the process for a final account in a MVL?

Answer 2

Liquidator must deliver notice to members accompanied by draft final account required by s94(1) and Rule 18.14
giving minimum of 8 weeks’ notice of specified date on which liquidator intends to deliver final account per s94(2)

 Notice must inform members that when the company’s affairs are fully wound up:
 liquidator will make up final account and deliver it to members; and
 when final account is delivered to RoC, Liquidator will vacate office and be
released

The affairs of the company are not fully wound up until the latest of:

 the 8 weeks having expired without the liquidator receiving any request for information [about remuneration or expenses]; or

 the filing of any application to court on the grounds that the liquidator’s remuneration or expenses are excessive; or

 any request for information [about remuneration or expenses] having been finally determined (including any applications to court)

 any application to the court to challenge remuneration or expenses having been finally determined

Question 3

When can a company’s affairs in a MVL be concluded in less than 8 weeks?

Answer 3

liquidator may conclude company’s affairs are fully wound up before period of 8 weeks, if every member confirms in writing that they are content with the draft final account

Question 4

When must the final account in an MVL be made up?

Answer 4

AS SOON AS as company’s affairs fully wound up, liquidator must make up an account of the winding up, showing how it has been conducted, and company’s property disposed of

Question 5

When must the final account in an MVL be:
A sent to members (not sent to creditors)?
B sent to CH?

Answer 5

before end of period of 14 days beginning with the day on which the account is made up

must send copy account to RoC before end of the same period, but not before it has been sent to members

Question 6

How can members object to the release of the liquidator in an MVL?

Answer 6

They can’t:

The use of a draft final account reflects that there is no process in MVL for members to object to the liquidator being released from office

 The liquidator is simply released upon filing the final account
 But members can challenge the liquidator’s remuneration and expenses
 Issuing the draft provides members with a window of opportunity in which to exercise those rights

Question 7

When must a liquidator in a CVL or comp liq (not MVL) make up a final account?

Answer 7

If it appears to liquidator that for practical purposes the winding up is complete

Question 8

How long after the final account is made up does the liquidator have to send the account to members and creditors? CVL

Answer 8

Before the end of the period of 14 days beginning with the day on which the account is made up:
 send copy of account to members
 send a copy to the creditors (other than opted out creditors)

AND give members and creditors notice and how they may object to the liquidator’s release

Question 9

How long after the final account is made up does the liquidator have to send the account to members and creditors? Comp liq

Answer 9

 Liquidator must send copy of account to creditors (*not also members and no time frame unlike CVL)

AND give members and creditors notice and how they may object to the liquidator’s release

Question 10

What must the notice accompanying the final account state?

Answer 10

 company’s affairs are fully wound up
 that creditors have a right to request information[about remuneration or
expenses]
 that the creditors have the right to challenge the liquidator’s remuneration and expenses
 that a creditor may object to the release of the liquidator by giving notice in writing to the liquidator before the end of the prescribed period

Question 11

How long is the prescribed period for challenging remuneration, expenses or object to release CVL or comp liq?

Answer 11

8 weeks

The notice must state that the liquidator will vacate office on delivering the final account to the RoC and will be released from office at that time, unless any of the creditors have objected to their release.

Question 12

When must the Final account be sent to CH (MVL & comp liq)?

Answer 12

 Must send copy account to RoC with statement as to whether any creditor objected to release during the prescribed period

 Must be sent WITHIN 7 DAYS, beginning with the day after the last day of the prescribed period within which creditors may object

Additional requirements in Compulsory liquidation:
 The final account and statement must additionally be sent to the Court
 The liquidator must deliver any books and records to the Official Receiver

Question 13

When does vacation and release occur?

Answer 13

All cases: vacation of office occurs upon filing of the final account

 Insolvent liquidations:

 Creditors have 8 weeks from delivery of the final account to object to release

 If creditors object to release, the liquidator must send an application to the Secretary of State
 Release will be at such time as the SoS determines

Question 14

When is the company dissolved?

Answer 14

Company dissolved automatically, 3 months from date final account is registered by the RoC

 Unless:
 Dissolution is deferred by an order of the court
 Upon the application to court by liquidator or other interested party

Question 15

How long should records about a case be retained?

Answer 15

Case record must be preserved for whichever is the later of:
 6th anniversary of vacation or release;
or
 6th anniversary of date on which security expires or ceases to have effect
 Therefore important to release the specific penalty bond

Cash book
 In a liquidation (other than MVL) the liquidator must prepare and keep a separate
financial record for the case, which must be retained for 6 years from vacation or release

CDD records must be retained for 5 years from the “conclusion of the business relationship”

Question 16

When can a company’s records be destroyed?

Answer 16

MVL / CVL: May destroy after 1 year from dissolution of the company
 In MVL – members may have given permission for earlier destruction
 Compulsory: at any time with the permission of the Official Receiver

However:
HMRC requirements re VAT/ PAYE records – 6 years
 Details of company’s insurers (potential future claims)
 Health and safety records, including accident books