How To Prepare For Voluntary Liquidation? Are you a Company Director looking for a solution to liquidate your company? Oliver Elliot can help you with both an insolvent or a solvent liquidation.
You can you use this guide to help you prepare for voluntary liquidation. Going into liquidation is about preparation, extraction of and assembling information so that the mandatory statutory and regulatory procedures can be processed and properly complied with.
Type of Process: Members Voluntary or Creditors Voluntary Liquidation?
If the company is solvent you will be wanting more likely than not, to opt for a Members Voluntary Liquidation. Whereas if the company is insolvent you will have no choice other than to deploy a Creditors Voluntary Liquidation if you want to initiate the procedure yourself on the ‘voluntary’ basis.
Articles of Association
Firstly, you will need to see how the company is set up and what its Articles of Association say about the requirements for winding up and holding formal meetings. Once you have determined what the Articles say, then you can set about convening the necessary meetings of the company’s board of directors and shareholders.
Meetings: How To Prepare For Voluntary Liquidation
There will need to be a meeting of the Board of Directors because the Directors hold office and in effect control the company. Such a meeting should be minuted to confirm that the Board approves that the company should be wound up and the reasons for the process being adopted.
Once the meeting of the Board of Directors has taken place, then the meeting of the shareholders can be convened to seek to pass the special resolution for the company to be wound up and an ordinary resolution for a liquidator to be appointed. A special resolution requires at least 75% of shareholders who vote to approve it, whereas an ordinary resolution requires more than 50%.
If the company is insolvent then notice must be provided to the company’s creditors and they will have the final say as to who is appointed as the liquidator. Initially however they must be informed of their voting rights and ability to lodge a claim. The creditors will need to be provided with a report that satisifies the information requirements of Statement of Insolvency Practice Number 6. Such requirements will provide creditors with information on the company’s financial history, reasons for its insolvency and the statement of affairs.
In order for a company to go into liquidation there is a requirement to file at Companies House, not just the resolution that it is to be wound up but also a Statement of Affairs, setting out its assets and liabilities.
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This page: How To Prepare For Voluntary Liquidation is not legal advice and not to be relied upon as such. If in doubt you should take independent professional advice on the facts of your case. This guide How To Prepare For Voluntary Liquidation is just for information purposes only. No liability is accepted for any reliance placed upon it. The legal issues in this page often arise from the Insolvency Act 1986.
Frequently asked questions:
Half to full page on what caused the company to go into liquidation?
Contact details and copies of previous three years profit and loss accounts from Directors
Copy of passport and utility bills (proof of address) from each Director
Details of Landlord and full amount owing to them
List of Company Assets
Details of Company Bank Account(s)
- Account Number(s) and Sort Code(s)
- Address and telephone number(s) of Bank
- Exact amount in each account
- Full names
- Any loans to the company: Were the loans to be repaid (i.e. as a debt owing from the company) or was it financed through the issue of new shares at a premium (i.e. as equity being released in the company)?
- Full names
- Break down of shares held i.e. Ordinary shares and share premium
- Loans to the company: Were they to be repaid (i.e. as a debt owing from the company) or was it financed through the issue of new shares at a premium (i.e. as equity being released in the company)?
- Full names of all creditors (including Government departments if any)
- Full amount owed to them
- Any secured creditors (i.e. Bank loans, mortgages)
- References used by Creditors
- Full names of all debtors (including Government departments if any)
- Full amounts owed to the company
- References used by Debtors
Employees of the company
- Names of all employees at date of liquidation
- Date of Birth
- Annual Salary
- Notice Period
- Number of days holiday per year
- Number of days taken
- Start of holiday year
- Any pension contributions
- Date employees last paid
- Date made redundant
- Full Particulars of all company pension schemes, including;
- Details of Scheme Trustee(s)
- Policy number
- Scheme provider
- Nature of Scheme; defined benefit or money purchase
- Full Particulars of any security granted by the company by way of fixed and or floating charge
- Details of any transactions between the Company, any of its subsidiaries, or any other company in which it has or had an interest and any one or more of the directors or associate(s) of them within the year leading up to the winding up resolution.
Typically this will be done by the Insolvency Practitioner’s firm on your behalf after obtaining information from you and your accountants. Alternatively, you and your accountants can prepare it.
The Insolvency Practitioner will adjudicate the claims of creditors, so if people claim for more money than what is showing on the Statement of Affairs, it is not a problem. The important aspect of this is that the information you put in the Statement of Affairs should be accurate to the best of your knowledge and belief.