Compulsory Liquidation with a wealth of experience In Manchester And London, UK
Here at Monarch solicitors, our team pride ourselves in offering industry leading advice on compulsory liquidation. With a wealth of experience assisting clients big and small, we’re on hand to help reach the best solution for you.
What is Compulsory Liquidation?
Compulsory liquidation, also known as a company being wound up, is the procedure through which a company’s assets are appointed to the company’s creditors via the court. The process begins with the filling of a petition to the court, where a judge then decides whether a winding-up order is appropriate. A company being insolvent is the most frequent reason a winding-up order is granted. Following liquidation, the company is then dissolved. The Insolvency Act (1986) and The Insolvency (England and Wales) Rules 2016 set out the procedure for Compulsory Liquidation.
How does Compulsory Liquidation take place?
Compulsory liquidation begins with a winding-up petition being presented at court. This petition has significant consequences for an organisation and whilst the petitioner is usually the company’s creditor, the company or its directors can also seek for the company to undergo compulsory liquidation. The most common ground for this is often the company being unable to pay its debts, however an order can also be made on other grounds as dictated in section 122(1) of the IA 1986.
Following this, is a court hearing, where the company is given the opportunity to dispute the petition and the Judge can then dismiss, adjourn or grant a winding up order.
When conducting a winding-up order, the role of the liquidator will initially be appointed to the ‘official receiver’ however, creditors and contributories are entitled to assign an individual to act as liquidator if they are a registered insolvency practitioner. Liquidators are considered officers of the court and therefore have a duty to behave impartially. There can be more than one liquidator appointed at once.
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