Week 12 - Compulsory Liquidation

Question 1

What act lays out the grounds for compulsory liquidation?

Answer 1

S122 Insolvency Act

Question 2

What are the first 2 ways compulsory liquidation can come about?

Answer 2

• company has resolved to by special resolution
• company has failed to obtain a trading certificate within 1 year of incorporation (BEIS)

Question 3

What are the final 2 ways compulsory liquidation can come about?

Answer 3

• company was public company before 1980 and has failed to re-register
• company has not commenced trading or has suspended business

Question 4

If a company cannot pay its debts, what 3 things can lead to forced liquidation?

Answer 4

• creditor serves a statutory demand for payment (if over £750)
• creditor obtains judgement but cannot obtain payment
• if it is proved to the court that company cannot pay its debts

Question 5

What do courts consider?

Answer 5

If it is just and equitable to wind up the company