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Company insolvency, dissolution & restoration - Coggle Diagram
Company insolvency, dissolution & restoration
A company becomes insolvent when it is able to pay its debts as they fall due. In order to protect the interest of creditors, employees and shareholders, the directors must take steps for the company's affairs to be wound up
Winding up involves the realisation of the company's assets and payments made to creditors in full or partial settlement of amounts owed to them
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In circumstances where the directors realise that the company is not yet but will become insolvent they might wish to appoint an administrator to manage the company until it is able to continue, to be sold or if all else fails to be wound up
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Winding up by the court
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A judgement creditor or a creditor petitions the court where an amount in excess of £750 has not been paid following written demand for payment
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The company fails to comply with certain statutory requirements, eg minimum numbers of members
Liquidator
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Ensure the winding up order halts any proceedings against the company, except by leave of the court
Provide the Official Receiver with information, access to books or such other assistance as they may reasonably require
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Phoenix Companies
Directors of an insolvent company cannot be appointed as directors of a company with a prohbited name
A prohibited name is one that is the same as that of the insolvent company or so similar as to suggest an association with that company
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Restoration
Application may be made to the Registrar by a former director or member of the company to restore the company to the register under an administrative restoration proceudre
In circumstances where an administrative restoration is not available, a procure for restoration by way of court order is also provided,
The Secretary of State may also apply to the court for restoration if this is justified in the public interest
Applications for administrative restoration must be made within the period of six years form the date of dissolution
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The six year period does not apply in circumstances where an application for administration restoration has been validly submitted and rejected by the Registrar. In these circumstances, the application to the court must be made within 28 days of the date of the notice of the Registrars decision even if the normal six year period has ended
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