Liquidation - members' voluntary liquidation Flashcards
(9 cards)
when can this process be used?
where the company is solvent i.e. company served its purpose and SHs want investments back
if it transpires the company is insolvent, the process will be transferred to creditors voluntary liquidation.
what are the 6 key stages?
- Boarding meeting
- Statutory declaration of solvency
- General meeting
- Post-appointment requirements
- Winding up
- Concluding winding up
what happens during the board meeting stage? (2)
o Ds resolve that the company can pay its debts in full (inc. interest) within 12 months from the commencement of winding up (i.e. it is solvent)
o Ds instruct a liquidator
when must the statutory statement of solvency be made?
What are the consequences if a statement is made without reasonable grounds?
it is a criminal offence for Ds to make the statement without reasonable grounds. If the company fails to pay its debts within 12 months, it is rebuttably presumed there wasn’t reasonable grounds.
what must be done before the GM and what happens at the GM?
o SH pass a SR + approve liquidator
o QFCHs must be given notice of the proposed SR
what are the post-appointment requirements? (3)
o Liquidator to publish in the Gazette + inform RoC within 14 days
o SR + solvency statement to be filed with CH within 15 days of being passed
o Liquidator to inform creditors within 28 days of being appointed
what happens to the directors’ powers on winding up?
D’s powers cease (unless the liquidator or SHs agree otherwise)
what steps are involved in concluding liquidation?
o L gives SHs 8 weeks’ notice of the final accounts & that once delivered to CH they will be released from office
o Final accounts showing how the company was wound up to SHs and CH
o Company dissolved by CH 3 months after they receive final accounts
when does the company formally go into liquidation?
as soon as the SR is passed
