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Company Insolvency - Coggle Diagram

- - - - Directors are unable to
        exercise any of their
        management powers
        without the consent of
        the administrator
        12 month fixed time limit for
        completion of administration
    - - Court procedure:
        Court may appoint where company is/likely to become unable to pay debts on the application of: the company, directors, a creditor, supervisor of a CVA or a liquidator
        If court makes an administration order, pending winding up proceedings are dismissed
        Apply to court - interim period including interim moratorium - hearing & order
      - Out of court procedure:
        Either company or directors or a qualifying floating charge holder may appoint an administrator this way
        If company has a QFCH (floating charge which relates to the whole/a majority of of the company's property), the company/directors will file a notice of intention to appoint administrator at court giving the QFCH 5 business days notice to consent or appoint its own administrator
        Once notice has been filed, company will have a 10 business day interim moratorium
    - - During administration, company has benefit of a full moratorium:
        
        no order, resolution to wind up can be made/passed
        
        no administrative receiver of company can be appointed
        
        no steps can be taken to enforce security over company property
        
        no legal proceedings can be commenced
        
        landlord cannot forfeit a lease of company's premises
        
        Does not prevent a QFCH from appointing an administrator though
    - - Remove/appoint directors
        Dispose of property subject to a floating charge
        Dispose of property subject to a fixed charge (with court consent)
- - - - Dissolution 3 months after
        notice by liquidator to
        Registrar of Companies
        
        A court-based process where an applicant presents a winding up petition to the court
        The following can apply: a creditor, the company (acting by the shareholders), the directors (by board resolution), an administrator, an administrative receiver, the supervisor of a CVA< the SoS for Business (on public policy grounds)
        Grounds for an order include:
        (1) inability to pay debts
        (2) it is just and equitable for the company to be wound up
        Once order is made = an automatic stay on proceedings against the company, all employees automatically dismissed, directors lose their powers and dismissed
    - - Dissolution 3 months from
        the filing by liquidator of
        final accounts and return
        
        S84(1) IA allows winding up without a court order in 3 situations:
        
        where company's purpose according to articles has
        expired and resolution of the shareholders
        
        where company resolves by special resolution to wind
        up the company (must be solvent)
        
        where company resolves that it is advisable to wind up
        the company due to its inability to carry on business
        (must be insolvent)
        
        CVL
        Creditors' voluntary liquidation (insolvent)
        Shareholders pass special resolution to place company into CVL
        Ordinary resolution to appoint nominated liquidator
        Within 14 days of passing, directors must ask the company's creditors to either approve the nominated liquidator or appoint their own
        Where creditors' choice of liquidator differs, creditors' nomination takes precedence
        
        MVL
        Members' voluntary liquidation (solvent)
        Directors required to swear a declaration of solvency stating they have made a full enquiry into company affairs and have formed opinion that company will be able to pay creditors in full within a period not exceeding 12 months from commencement of winding up
        Any director making such declaration that does not have reasonable grounds for their opinion is liable to a fine/imprisonment
        Members must pass a special resolution to place company into MVL, once passed the winding up commences
        Ordinary resolution to appoint an liquidator