公司法outcome4

IntroductionToomanycompaniesfailbecausedebtsandliabilitiesexceedassets,FailstopayadebtwhichresultedfromsuccessfullegalproceedingsorFailstopay,compoundorsecureanundisputeddebtwithinthreeweeksofformaldemand.Thesecompanieswillhappeninsolvent,whichmeanshavinginsufficientassetstomeetdebtsandliabilities.Tosolvetheinsolvent,companieshavethreeactions:Voluntaryliquidation,CompulsoryliquidationandAdministration.Mainbody1.VoluntaryliquidationVoluntaryliquidationoccurswhenthemembersofthecompanyresolvetovoluntarilywind-uptheaffairsofthecompanyanddissolve.Voluntaryliquidationbeginswhenthecompanypassestheresolution,andthecompanywillgenerallyceasetocarryonbusinessatthattime(ifithasnotdonesoalready).Ifthecompanyissolvent,andthemembershavemadeastatutorydeclarationofsolvency,theliquidationwillproceedasamembers'voluntarywinding-up.Insuchcase,thegeneralmeetingwillappointtheliquidator(s).Ifnot,theliquidationwillproceedasacreditor'svoluntarywinding-up,andameetingofcreditorswillbecalled,towhichthedirectorsmustreportonthecompany'saffairs.Whereavoluntaryliquidationproceedsbywayofcreditor'svoluntaryliquidation,aliquidationcommitteemaybeappointed.Whereavoluntarywinding-upofacompanyhasbegun,acompulsoryliquidationorderisstillpossible,butthepetitioningcontributorywouldneedtosatisfythecourtthatavoluntaryliquidationwouldprejudicethecontributories.Voluntarywindingupcanbedoneintwoways:membersvoluntarywindingupandcreditorsvoluntarywindingup.Ifthecompanyresolvesthatitcannotcontinueinbusinessasaresultofunmanageabledebts,thenitcanbevoluntarilywoundup.ThecompanymustpassaresolutionThecompanysecretarymustthenpostanoticeintheLondonGazettewithintwoweeksinordertoinformsuppliers,creditorscustomersandthegeneralpublic.2.CompulsoryliquidationAcourtorderisobtainedforcingthecompanytowindup.Itcouldbeinitiatedbyacreditororashareholderorbycertaingovernmentrepresentatives.Thereasonofcompulsoryliquidationcouldbe:Thecompanyhasaskedforacompulsoryliquidation.Aspecialresolutionhasresolvedthatthecompanybewoundupbythecourt;Itisapubliccompanybuthasstillnotbeenissuedwithatradingcertificateafter12months;Stillnotstartedtradingafter12monthsofbeinggrantedacertificate;Suspendsbusinessforayear;Membershiphasfallenlowerthantwo;Isunabletopayitsdebts;Thecourtisoftheopinionandisnotpursuingthebusinessactivitiessetoutinitsmemorandum.Onceliquidationcommences(whichdependsuponapplicablelaw,butwillgenerallybewhenthepetitionwasoriginallypresented,andnotwhenthecourtmakestheorder),dispositionsofthecompany'spropertyaregenerallyvoid,andlitigationinvolvingthecompanyisgenerallyrestrainedUponhearingtheapplication,thecourtmayeitherdismissthepetition,ormaketheorderforwinding-up.Thecourtmaydismisstheapplicationifthepetitionerunreasonablyrefrainsfromanalternativecourseofaction.Thecourtmayappointanofficialreceiver,andoneormoreliquidators,andhasgeneralpowerstoenablerightsandliabilitiesofclaimantsandcontributoriestobesettled.SeparatemeetingsofcreditorsandcontributoriesmaydecidetonominateapersonfortheappointmentofliquidatorandpossiblyofsupervisoryliquidationcommitteeOncethenoticeisregistered,orthecourtorderismade,allclaimsagainstthecompanyformoneyarehaltedandconsideredbytheliquidator.Thecompanywillnotengageinanynewworkbutmayfinishoutstandingworkifthiswillgainthepaymentofmoneyagreed.Aliquidatorisappointedtotakeovertheaffairsofthebusinessfromthedirectors.Aliquidatorisqualifiedinthespecialisedareaofinsolvencylawandpractice.Liquidatorshouldensurethattheassetsofthecompanyareturnedintocasheffectivelyandthendistributetheproceedstothewaitingcreditors.Anysurpluswillgotothosepartiesnextinlineforpaymentsuchasemployeesorshareholders.Theliquidatortakesoverpowerfromthedirectorsandhavetheabilitytoactonthebehalfofthecompany(InsolvencyAct1986).Oncetheliquidatorhascompletedgatheringanddistributionoftheassets,ameetingwillbecalledtostudytheaccountsofthewindingup.Theliquidatorwillbereleasedfromfurtheractivityandwillsendfinalaccountsandmeetingdetailstotheregistrar.3.AdministrationIfitmaybepossibletosavethecompany,thenthecourtcanorderthatthebusinessbeputintoadministration.Attemptscanthenbemadetosavethecompany.Ifitmaybepossibletosavethecompany,thanthecourtcanorderthatthebusinessbeputintoadministration.Attemptscanthenbemadetosavethecompany.Whilstacompanyisinadministration,nowinding-upcantakeplaceandamoratoriumisplacedonthecompany’sdebts.ThismeansthatanyactionstohavetheserepaidaresuspendeduntilthecourtdecideswhattodonextDuringthereorganisationperiod,asaresult,theadministratorusuallyrunsthebusinessratherthanthedirectors,andanyadditionalliquidityrequirementseffectivelyhavetobemetbyfundsprovidedbyexistingcreditorsratherthanbyanysuper-senior'DIPfinancing'.Aqualifiedadministratorisappointedwhothenattemptstorescuethebusiness.Theadministratorisanofficerofthecourtandanagentofthecompany,andisnotpersonallyliableforanycontractssheorhemakesonbehalfofthecompany.Hehasthepowertodoanythingnecessaryorexpedientforthemanagementoftheaffairs,businessandpropertyofthecompany.