Liquidation - creditors' voluntary liquidation

Question 1

when is this process used?

Answer 1

this is the out-of-court liquidation process used when the company is insolvent

Question 2

what are the six main stages?

Answer 2

1. board meeting
2. general meeting
3. creditor approval
4. post-appointment requirements
5. winding up
6. concluding winding up

Question 3

what happens at the board meeting stage?

Answer 3

o Ds resolve (simple majority) to place the company into CVL
o Ds instruct an insolvency practitioner

Question 4

what must take place before the GM and during?

Answer 4

o QFCHs must be given notice of the proposed SR
o Must pass a SR + confirm agreement to proposed liquidator

Question 5

what happens in the creditor approval stage? what are the timescales?

Answer 5

Ds ask creditors for their decision on the appointed liquidator
 Can either use deemed consent procedure or hold a virtual meeting
 No response = company liquidator stands
 Creditors must decide at least 3 days after and within 14 days of the SR

Ds send creditors a statement of affairs within 7 days of the SR

Question 6

what are the post-appointment requirements? (4)

Answer 6

o Liquidator to publish in the Gazette + inform RoC within 14 days
o Liquidator to inform creditors within 28 days of being appointed
o SR must be advertised in the Gazette within 14 days of being passed
o SR to be filed with CH within 15 days of being passed

Question 7

what happens to the directors powers?

Answer 7

they cease

Question 8

when does the company formally go into liquidation?

Answer 8

once the SR is passed

Question 9

what happens as part of concluding liquidation? (4)

Answer 9

o L produces a final account showing how the company was wound up
o Account must be sent to SHs + creditors within 14 days of being made up
o Creditors also sent a notice detailing how they can object to L’s release
o L sends the account to CH who dissolve the company after 3 months