Ch 20- Insolvency

Question 1

What are the 5 procedures involved in the member’s voluntary liquidation ?

Answer 1

1. A special resolution is passed.
2. A liquidator is appointed by the company.
3. The directors makes a sworn statutory declaration of solvency, delivered to the registrar within 15 days.
4. The liquidator convenes a meeting within 3 months.
5. A final meeting is called upon completion.

Question 2

Procedure for a creditor’s voluntary solvency.

Answer 2

1. A special resolution is passed.
2. The creditors come together for a meeting within in a notice of at least 7 days and advertised in the gazette.
3. A meeting of members - to nominate 5 representatives to The liquidation Comittee.
4. The liquidator conveys a meeting three months from the liquidation.

Question 3

When does a company undergo compulsory liquidation ?

Answer 3

A company undergoes compulsory liquidation when they are unable to pay its debts of at least £750 within 21 days.