Phillips & Co - Insolvency Practitioners in Gerrards Cross, Bucks

A Company can enter a Creditors Voluntary Winding Up when it becomes insolvent, it cannot pay its debts as and when they fall due. The company Directors should agree that they need professional insolvency advice. Initially the company accountant or solicitor may refer them to a Licensed Insolvency Practitioner. Alternatively they can contact an Insolvency Practitioner directly.

The Insolvency Practitioner is an accountant or solicitor who is licensed to act in matters of insolvency under the Insolvency Act 1986.

The Directors will meet with the Insolvency Practitioner and after discussing the company’s position, decide if Liquidation is the correct cause of action. If the directors decide to proceed, the Insolvency Practitioner will assist in drawing up formal notices convening the necessary meetings. A Meeting of Members (shareholders) and a Meeting of Creditors are required to appoint a Liquidator.

All known creditors must be sent a notice of the meeting and are provided with formal proxies for voting. The Insolvency Practitioner will start to gather financial information and prepare the Statement of Affairs. It details the assets and liabilities of the company and gives an indication of the deficiency that will be suffered by the creditors.

A Directors Meeting is held and the Statement of Affairs is approved. The document is signed as a Statement of Truth.

The director’s meeting is followed by the formal Meeting of Members. A Resolution is passed to place the company into Creditors Voluntary Liquidation and the Liquidator is appointed. The Insolvency Practitioner who has helped convene the meetings is normally appointed as Liquidator.

At the Creditors Meeting, creditors are given copies of the Statement of Affairs, and they are able to question the Director. The creditors (either in person or by proxy), will vote on the appointment of the Liquidator.

A Liquidation Committee of either 3 or 5 creditors may be appointed at the Creditors Meeting. It is their duty to assist the Liquidator and sanction his/her activities.

Control of the Company and its assets passes to the Liquidator immediately upon appointment and it is the duty of the Liquidator to realize the assets for the benefit of the creditors. Within six months of the date of Liquidation the Liquidator has a statutory duty to report to the Insolvency Service on the conduct of Director(s).

Banks, lending institutions and individuals may have a registered Debenture for monies advanced to the company. This gives them security over some or all of the company assets and an advantage over the creditors.

The Liquidator will validate the debenture before discharging the debenture holder’s debt.