Voluntary Liquidation

Question 1

Members Voluntary Liquidation

Answer 1

Used when comp is SOLVENT
(Had Asserts greater than liabilities

- Members must pass:
1 ORDINARY RESOLUTION- where articles provide for liquidation on the expiry of a fixed date 
OR
2 SPECIAL RESOLUTION 
For any other reason

Question 2

Members Voluntary liquidation

What happens after resolution passed?

Declaration of solvency

IP

Answer 2

Once resolution passed Ds must make DECLENSION of SOLVENCY stating they believe the company will be able to pay its debts within 12 MONTHS

False declaration= criminal offence

Members then appoint IP to act as liquidator by passing ORDINARY RESOLUTION
IP will realise assets & distribute proceeds

Once liquidation process complete Liquidator must send copy of final a/c to members
Company will be dissolved 3months later

Question 3

Creditors Voluntary Liquidation

Answer 3

Company. Intends to liquidate voluntarily but is insolvent

NO DEClERATION of INSOLVENCY can be made

If disagreement CREdItORS choice of IP prevails over members

Creditors can appoint up to 5 folk to sit on liquidation committee

STATEMENT OF AFFAIRS - D must send this to creditors (full details of creditors -amounts of their claims name addresses)

Liquidator will realise assets & distribute proceeds

Once liquidation process complete- liquidator submits final report to members & creditors and a copy to REGISTRAR OF COMpANIEs

Question 4

Creditors voluntary liquidation
- decisions made by creditors will be under ‘Deemed consent process”
Explain meaning

Answer 4

IP can seek a decision by the creditors which DOES NOT REQUIRE CREDITORS to vote

Provided IP does NOT RECEIVE OBJECTIONS from 10 % or more creditors by value the proposed DECISION will be DEEMED to have been taken

…..
If 10 % or more object - alternative decision making procedure- eg virtual meeting, correspondence. Or electronic voting