Company Law / Insolvency (wk 2)

Question 1

Administration?

Answer 1

a process where an Administrator takes control over a company that’s facing financial difficulties, to rescue it from LIQUIDATION.

Question 2

rescue mechanisms for liquidation/administration?

Answer 2

• without Court order: can appoint an Admin. to rescue the company. under Insolvency Act 1986, directors do this through statutory filling, give notice to court. A creditor with a floating charge can also appoint a director but just give 2 day written notice.

Question 3

Pre-pack Admin?

Answer 3

a company arranges to sell its assets before officially entering admin, sale happens immediately after an admin. is appointed

Question 4

Compulsory Liquidation?

Answer 4

A Court order forcing the company into liquidation and it’s initiated by creditors.

Question 5

Members Voluntary Liquidation?

Answer 5

Shareholders chose to liquidate it, ensuring all debts can be paid using its assets.

Question 6

Creditors Voluntary Liquidation?

Answer 6

initiated by members WHEN UNABLE TO PAY DEBTS.
- ORDINARY RESOLUTION: articles of association agree to go ahead with it.
- Special Resolution: articles are silent/unsure. this becomes the default option.

Question 7

Administration Duties and Power & Liability?

Answer 7

• Duties: notice to company house, write to all creditors, get all financial details.
• Power & Liability: can borrow/raise money, fire director, enter contracts with 3rd parties.