Insolvency

Question 1

Must a company be insolvent or solvent for Members Voluntary Liquidation?

Answer 1

Solvent.

Question 2

Must a company be insolvent or solvent for Creditors Voluntary Liquidation?

Answer 2

Insolvent.

Question 3

What shareholder resolutions are needed for voluntary liquidation?

Answer 3

A SR to resolve to wind the company up and an OR to appoint or nominate a liquidator.

Question 4

What creditor approval must directors get in a CVL?

Answer 4

Directors must ask creditors to approve the nominated liquidator within 14 days of the SR resolving to wind up the company.

Question 5

What are the statutory grounds for compulsory liquidation?

Answer 5

1. It is just and equitable for the company to be wound up.
2. The company is unable to pay its debts. This must be evidenced by a failure to comply with a creditor’s statutory demand for above £750. The company has 21 days to pay after which the creditor can petition the court to wind the company up.