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03 Apr
2017


Posted in
General news Liquidation

How fast can I liquidate a company under the new insolvency rules?

The answer is seven days. New insolvency rules came in on the 6th April 2017 which has changed the way companies go into liquidation. There is no longer a need for a physical creditors meeting unless 10% of creditors request it.

From the 6th April 2017 the procedure to liquidate a company will be:

Day 1

Directors sign a board resolution to liquidate using a creditor’s voluntary liquidation and sign a short notice to shareholders.

The Insolvency Practitioner the writes or emails all creditors and shareholders of the intention to liquidate on day 7. The creditors are invited to join a virtual meeting or not (if not it is by deemed consent).

Day 4

The Insolvency Practitioner will send out a report to creditors (or make it available online) showing the statement of affairs as prepared by the directors and a report (called a SIP 6 report). The SIP report summarises he company details, a brief history of the business and a list of all known creditors and shareholders.

Day 7

The shareholders meet (if they have given consent to short notice) and pass the resolution to liquidate.

Shortly after that creditors meet by a virtual meeting – meaning they telephone in to a meeting or join by video conference facilities.

Sometimes the meeting may not be a virtual meeting – it can be by deemed consent. This means the directors have decided no virtual meeting is needed. If no one owed above 10% objects then it is just deemed to go into liquidation at 23.59 hours that day.

If creditors want a physical meeting, where they can attend and ask questions to the directors and insolvency practitioner then 10% of them by value need to request it. This meeting would then be called in another seven days time.

Summary
Article Name
How Fast Can I Liquidate A Company Under The New Insolvency Rules?
Description
The answer is seven days. New insolvency rules came in on the 6th April 2017 which has changed the way companies go into liquidation.
Author
Publisher Name
Kirks Insolvency
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