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BUSINESS, MEMORANDUM OF ASSOCIATION + APPLICATION FOR REGISTRATION +…

- - - - CHARACTERISTICS = LEGAL ENTITY separate from members
        REQUIRES INCORPORATION - filing specified documentation WITH REGISTRAR OF COMPANIES at Companies House - docs must be delivered to company house statement that "at least 2 persons who wish to associate to carry on a business for profit and INCORPORATION DOCUMENT"
        
        INCORPORATION DOCUMET MUST CONTAIN:
        
        Name of LLP
        
        Country + address of registered office
        
        Name and address of each member
        
        identities of designated members
        
        details of People with Significant Control (PSC=more than 25% of assets or voting rights or other right to control) - All LLP's must keep register of people with significant control
        
        If registrar satisfied that his documentation has properly been submitted, the registrar issues certificate of incorporation. companies house public record subject to them paying fee
        
        LLP Act provides default rules
        
        MEMBERS
        
        at least 2
        
        less than 2 for more than 6 months: person who carried on business liable with LLP for debts
        
        at least 2 must be DESIGNATED MEMBERS (powers equivalent to directors + duties/responsibilities of being member of LLP + responsible for filing req at companies house(=filing annual accounts, sending details to the registrar in relation to charges entered into by LLP, sending notices to registrar regarding member leaving/joining LLP must be filed within 14 days of change))
        
        free to leave
        
        adding member = unanimous consent
        
        MEMBER AS AGENT - each member is agent of LLP and can bind LLP (as in general partnership-difference is LLP bound instead of indiv partners)
        ALTHOUGH indiv not liable for debts of LLP - still regarded as member once retired unless notice has been sent to the registrar of companies or to any individual dealing with the LLP
        
        RIGHTS OF MEMBERS = similar to rights of partners in general partnership
        
        share of profits (equal by default)
        
        not entitled to be paid for working for partnership but are entitled to INDEMNIFICATION by LLP if they pay expenses on behalf of the LLP
        
        inspect books and records
        
        management (can decide majority of matters connected with business BUT TO CHANGE may be made in nature of business of LLP without the consent of all members)
        
        DUTIES - if violate must account to LLP for that profit
        
        refrain from competing with LLP
        
        refrain from profiting off LLP's name or property
        
        account to LLP
        
        LIABILITY OF MEMBERS
        
        no liability for LLP debts or wrongful acts or omissions of fellow members
        
        only liable for amount of capital contribution (no further liability for insolvency if already paid = member can therefore lose amount invested in LLP BUT their PERSONAL WEALTH protected)
        
        still subject to rules for wrongful and fraudulent trading = on insolvency could still be liable to contribute to LLP's debts
        
        TERMINATION -
        
        continues despite members death
        
        (to cease existing=) must be removed from register at Companies House
        
        members can apply to be struck off (on majority vote) - if they decide LLP no longer needed / if dormant and no longer trading. Members making app req notify other members / creditors of LLP / employees / trustee of any pension fund app will strike off
        
        = registrar of companies will publish in London Gazette and will strike off LLP 3 MONTHS after date of notice = AT THAT POINT LLP CONSIDERED DISOLVED
        
        TAXATION
        
        LLP NOT TAXABLE - individual partners taxed on THEIR SHARE OF PROFITS
  - - - small companies shareholders usually appoint themselves to be directors (not necessary) + bigger companies called directors
      - private
      - public
- - - - PARTNERSHIP UNCLEAR? - 1st check = AGREEMENT TO SHARE PROFITS = prima facie evidence
        presumption doesn't apply to = 1.wages 2.agreement only to repay debts
        Sharing of Losses - agreement to share losses some evidence of partnership BUT NO PRESUMPTION
        ABSENCE of agreement to share losses does not prevent formation of partnership
        MERELY owning property together and sharing gross returns does not create a partnership
        CONTRIBUTION NOT REQUIREMENT
  - - - an agents act can bind principal ONLY if agent acted with AUTHORITY, same true of partner
        2 TYPES OF AUTHORITY
        
        ACTUAL AUTHORTIY - believed to have - expressly granted to partner in partnership agreement OR vote of partners at partnership meeting
        OR IMPLIED - course of dealings or related to express authority
        
        APPARENT AUTHORITY (OSTENSIBLE AUTHORITY) - Partners act that seems related to business of the kind carried on by firm binds firm
        2 CONDITIONS / OBJECTIVE TESTS
        
        Is partners act related to firms business (something a reasonable person would think is related to firms business)
        
        Is transaction one a partner in this type of firm would have authority to do (contract reasonably related + partner in this type of firm usually enter a contract like this)
    - - What if test not satisfied = Partner lacked Actual or Apparent Authority
        
        partner who contracted with third party is liable; partnership not liable
      - Partner had apparent auth only =
        partnership bound but can pursue partner for contractual remedies
      - TORT LIABILITY - Firm liable for partners tort committed in ordinary course of partnership business or with authority from fellow partners
  - - - NO RIGHT TO DISTRIBUTION - unless otherwise agreed=partner has no right to distribution prior to dissolution
      - ASSIGNMENT OF PROFITS = partners right to share of profits is assignable
        
        assignee does not become a partner or gain management rights JUST RIGHT TO RECEIVE WHEN DISTIBUTED
        
        only way outsider can become a partner is by UNANIMOUS AGREEMENT (unless partnership agreement provides otherwise)
    - - INCOMING = Partner liable for debts only if incurred AFTER they became a partner
      - OUTGOING = partner who leaves still liable for existing debts - true even if partnership agrees o hold him harmless (say they wont collect money from him) - UNLESS CREDITOR AGREES TO LET THEM OFF= NOVATION agreement - more common for outgoing partner to get HOLD HARMLESS AGREEMENT=agreement from partnership to indemnify outgoing partner for existing debts BUT MAY STILL BE PURSUED BY CREDITOR (between firm only IF MUST PAY CREDITOR will be able to claim money back from partners)
        Can be liable of debts AFTER leaving if didn't give correct notice (Letter / Email) - e.g. notice of retirement
        ACTUAL NOTICE NEEDED TO AVOID LIABILITY TO ANYONE WHO HAS DEALT WITH FIRM WHILST PARTNER WAS A PARTNER
        +ANYONE WHO DID NOT DO BUSINESS WITH THE FIRM BEFORE THE PARTNER LEFT BUT WHO EXTENDS CREDIT TO THE FIRM AFTER THE PARTNER LEAVES NEEDS TO BE NOTIFIED TO AN ADVERTISEMENT IN THE LONDON GAZETTE THAT THE OUTGOING PARTNER IS NO LONGER A PARTNER
        LONDON GAZETTER - 17TH CENTURY - advertisement here - if no advert new customs of partnership who extend credit to the firm could hold the outgoing partner liable for the debt owed
      - HOLDING OUT - non partner may be liable for partnership debts if they hold themselves out as partner, or knowingly allow another to do so (e.g.not ensuring name taken off partnership notepaper / website / etc)
      - INTERNAL RELATIONSHIP - partnership act provides only fall back position applies if partners haven't considered an issue, if not entered into partnership agreement addressing issue
  - - - 1st partners bound to render true accounts + provide full info to fellow partners with regard to anything that might affect partnership
      - 2nd partners must also account for any profits they make by using partnership property or in the name of the partnership - even DUTY TO ACCOUNT FOR SECRET PROFITS
      - 3rd duty to refrain from competing with partnership
    - - PARTNESHIPS FOR SPECIFIC TERM OR UNDERTAKING - terminates on expiration of term or completion of undertaking
      - PARTNERSHIPS AT WILL - if not agreed how long partnership will last = BECOME PARTNERSHIP AT WILL = terminates by any partner giving notice (notification writing/oral) to others
        
        also automatically dissolved on DEATH/BANKRUPTCY of partner = remaining partners lose their business and income immediately
      - COURT ALSO POWER TO DISSOLVE = e.g. if parnership not at will and a aprtner becomes incapable of performing their duties under a partnership agreement OR
        when partner engages in conduct that is prejudicial to the partnership OR
        when a partner persistently breaches the partnership agreement
      - EFFECT OF DISSOLUTION = not instantly disappear business continues and partners can still bind partnership HOWEVER DUTY TO:
        
        not to take on new business
        
        wind up by completing transactions that begun before dissolution / gathering and selling firms assets and paying its debts
        
        any money leftover used to:
        repay partners loans, then
        repay partners capital, then
        distribute in accordance with agreement (or equally if no agreement)
    - - UNANIMOUS VOTE REQUIRED FOR: admitting new partner + changing nature of partnership business + amending partnership agreement + expulsion of partner(but partner wouldn't expel himself LOL)
- - - - DE FACTO DIRECTOR - power of director but avoid responsibility / obligations / duties of dictatorship = NOT APPOINTED BUT CARRIES OUT DUTIES
      - SHADOW DIRECTOR - behind director controlling them BUT ONLY IF LISTENED TO AND FOLLOWED
      - Formally appointed = DE JURE DIRECTOR
  - - - ACTUAL AUTHORITY = given in service contract OR decision of board of directors
      - APPARENT AUTHORITY = based on a representation to 3rd party by company that person in q is acting WITH COMP authority. REPRESENTATION CAN BE MADE BY WORDS OR CONDUCT BUT MUST BE MADE BY COMPANY AND NOT MERELY BY THE DIRECTOR
  - - - DUTY CHANGES IF COMPANY INSOLVENT/BRINK OF INSOLVENCY - duty changed from members to CREDITORS
      - GOOD FAITH = subjective = WHAT THAT DIRECTOR HONESTLY CONSIDERS - wont be breached UNLESS HONESTLY BELIEVES
        
        also dont look back benefit of hindsight UNLESS SUCH RIDICULOUS DEC WHEN MADE SHOWING BAD FAITH
- - - - PRIVATE LIMITED COMP = limited or LTD
      - PUBLIC LIMITED COMP = public limited or PLC
  - - - by guarantee - members required to pay fixed amount usually £1 if company wound up = companies limited by guarantee NOT used as trading companies as creditor unlikely to provide credit when little chance of recovering the money if company doesn't pay.
        Members not invest guaranteed amount in advance = company itself worth little = usually small charitable non-profit organisations which incorporate as a company limited by guarantee e.g. preschools = easy for membership to change and these organisations usually operate on a cash basis without borrowing
      - shares - most common - members (called shareholders) pay money for shares of ownership in company - usually money paid upfront - usually not returned during lifetime of company
      - PUBLIC COMPANY (PLC) - permitted to issue shares to public
      - PRIVATE COMPANY (LTD) - cannot advertise shares for sale - most are this / default position
        no one cant be agent of company that doesnt exist - ADVISE NOT TO SIGN ANYTHING UNTIL COMPANY
        
        If client wants sign pre-incorporation contract = COMPANIES CAN INCORPORATED ON SAME DAY /OR/ SHELF COMPANY
        
        Pre-incorporated
        
        Can be purchased
        
        Begin business immediately
        
        shelf company = already incorporated often by sols but not traded sitting on shelf waiting to be purchased, will take efw days for company name to change. if people dont want shelf company must file certain docs at company house.
        People seeking to form company REFERRED TO AS PROMOTERS
        
        one doc to be filed = MEMORANDUM OF ASSOCIATION - Doc authenticated / signed by persons wishing to become members
        
        other form = app for registration = Name / location of office / business details / limited by shares or guarantee / public or private / share capital / initial shareholding / director / officers (name and addr of comp secretary(if has one)) / details of persons with sig control (more than 25% vot rights OR ability to control company )
        private can be incorporated with as little as 1 share for £1 BUT public MUST have minimum shareholding with a nominal value of £50K (all of the money doesnt have to be paid to the comp)
        A private company req 1 director public req 2
        Private not req to have comp secretary
- - - - ORDINARY SHARES = EQUAL RIGHTS FOR VOTING / DIVIDENDS / DISSOLUTION
      - If SUPERIOR to ordinary = PREFERRED SHARES
        
        Dividend preference
        
        paid first before ordinary shares
        CUMULATIVE =
        
        Rolls over to next year if not paid UNTIL PAID
        NONCUMULATIVE =
        
        that year's right disappears at end of year if not paid
    - - to pass 2nd permission stage = Court would likely want to know whether Graham has support of atleast 2 of the shareholders holding 10% of shares
  - - - MEMBER MEETINGS also called GENERAL MEETINGS
        
        Dir call general meeting
        
        Shareholders with atleast 5% of company's paid-in voting capital have RIGHT TO REQ dir call a meeting (unusual circumstances e.g. when meeting is about sacking them so wont call it themselves)
        
        Members Demand = set out resolutions wish to be passed
        
        IF dir refuse to call meeting properly demanded by members = Members who requested meeting may THEMSELVES call general meeting and comp MUST REIMBURSE member for any reasonable expense in calling meeting
        
        if member calling meeting to consider resolution to sack director must give comp 28 CLEAR DAYS NOTICE
        
        Dir best place to decide if shareholder decision necessary - if shareholders resolution NEEDED for comp to make a dec then board will organise this
        
        HOW DIR CALL MEETING = pass resolution at a board meeting to call a general meeting
        
        BOARD MUST GIVE NOTICE OF MEETING TO ALL MEMBERS / DIRECTORS / SHAREHOLDERS
        
        if member deceased - notice must be given to their personal representative
        
        if member insolvent - notice must be given to the trustee in bankruptcy
        
        also to auditor if one appointed
        
        CANNOT BE ORAL but email / hardcopy / website - CONTENTS prescribed by legislation
        
        Company name
        
        Date / Time / Place
        
        General nature of business being considered
        
        Text of any special resolutions
        
        How to send proxy on your behalf (PROXY STATEMENT)
        
        IF NOTICE INSUFFICIENT - Member unhappy with meeting action can seek to have action declared INVALID
        
        14 CLEAR DAY - don't count day notice sent out OR day meeting held BUT CAN COUNT wknds + public holidays
        =14 RULE APPLIES WHEN HAND DELIVERING NOTICE
        
        IF EMAILED / POSTED = +2 MORE DAYS FOR DEEMED SERVICE = 16 clear days
        
        SHORT NOTICE - members can agree hold meeting on short notice
        FOR PRIV COMP with model articles 2 CONDITIONS
        1st = majority of shareholders must agree
        2nd = majority must also hold at least 90% of shares
        Members can hold meeting immediately SO LONG AS NO RESOLUTION TO BE PASSED WHICH REQ info to be available at registered office for 15 days prior to meeting
        
        QUORUM REQUIREMENTS - GENERAL MEETING NOT VALID UNLESS QUORUM PRESENT in comp with 2+ members quorum is 2 UNLES comp article provide otherwise
        
        Member CANNOT vote to ratify their own breach of dir cuty - OTHERWISE MEMBERS FREE TO VOTE TO SELF INTEREST DONT HAVE TO VOTE I BEST INTERESTS OF COMPANY
        
        2 TYPE RESOLUTION
        
        ORDINARY - passed when over 50% vote in favour
        
        SPECIAL - passed when 75% or more vote in favour
        
        Under Comp Act a special res req to =
        
        CHANGE COMP NAME
        
        AMEND COMP ARTICLES
        
        REDUCE COMP SHARE CAPITAL
        
        REMOVE PREMPTION RIGHTS
        
        WIND UP COMPANY
        
        IF APPROVED MUST BE FILED AT COMP HOUSE within 15 days of its approval
        
        AFTER Spec Res passed company has 15 days to file resolution at Comp House
        
        DEFAULT position is ORDINARY RES - UNLESS Companies Act OR Articles state must be special resolution
      - PUBLIC Comp REQ (PRIV comp NOT) to have annual General Meeting
    - - At general meeting only shareholdes who are present OR who sent proxies ARE COUNTED - OR shares of deceased / bankrupt disregarded UNLESS personal representative / trustee in bankruptcy HAD APPLIED TO BE ENTERED ONTO REGISTER OF MEMBERS
      - ANOTHER METHOD = WRITTEN RESOLUTIONS
        
        Cuts down on formality required for shareholders resolutions
        
        instead of holding meeting PRIV COMP can pass MOST shareholders resolutions through OBTAINING APPROPRIATE APPROVAL from shareholders in writing
        
        = SAVES TIME + MONEY of having face-to-face meeting
        PROCEDURE USUALLY INSTIGATED BY THE BOARD - BUT shareholder with 5% of voting shares can require board circulate written resolution
        
        MUST contain instructions for voting in favour - usually signing and returning the resolution to the company (SHAREHOLDER NOT IN FAVOUR OF RESOLUTION DOESNT HAVE TO RETURN VOTE NO)
        .
        
        TIME LIMIT = usually 28 days from circulation date - starts running as soon as res circulated - NO REQ FOR CLEAR DAYS
        .
        
        No req to wait AS SOON AS ENOUOGH VOTES (i.e. more than 50% for ORDINARY + at least 75% for SPECIAL)
        
        required approval BASED ON ALL SHARES ENTITLED TO VOTE - not just votes from people who bothered to send vote
        
        TYPICALLY USED - only if dir are confidence res will be passed
        
        any docs which have to be at registered office prior to meeting CIRCULATED WITH RES and 15 DAY RULE DOESNT APPLY
        
        DIR CANNOT BE DISMISSED WITH THIS METHOD - dir right to defend himself e.g. defend/speak at general meeting
- - - - Model art dont remove dirs powr to allot
      - IN CASES DIR NOT HAVE POWER = need approval from shareholders through ORDINARY RES
      - ISSUING SHARES AT PREMIUM = issuing shares for more than their nominal value
        
        EXCESS CONSIDERATION = still part of share capital BUT RECORDED special ACC = PREMIUM ACCOUNT - like share capital not returned to members during lifetime of comp
    - - PREEMPTION RIGHT = shareholders want maintain their proportional ownership interest in a company
        COMPANIES ACT provides statutory right under CERTAIN cirumstances
        
        If comp issues new shares for cash must first be offered to the existing shareholders in same proportion as they currently own shares
        
        UNDER COMP ACT MUST BE GIVEN ATLEAST 14 DAYS TO DECIDE WHETHER OR NOT TO PURCHASE THE SHARES
        
        Some limitations = APPLY ONLY TO SHARES ISSUED FOR CASH - if shares exchanged for property preemption rights dont apply
        
        articles can also MODIFY / DISAPPLY preemption rights
        
        shareholders may disapply with SPECIAL RES
- - - - 1.
        2.
        
        practitioner accepts = nominee
        
        nominee call meeting of creditors
        
        Nominee will oversee/supervise implementation of IVA = now called SUPERVISOR
      - For IVA to go ahead AT LEAST 75% in value of unsecured creditors must agree to the proposals
        IVA not go ahead unless more than 50% of independent voters vote in favour
        If necessary amount vote in favour of IVA = will bind all ordinary unsecured creditors who were notified of the creditors meeting even if didnt vote in favour
      - SECURED CREDitor and PREFERENTIAL CREDitors
        
        SECURED = one whos taken charge to proteect debt
        
        PREFERENTIAL = an employee owed wages / holiday pay frrom the last 4 months
      - if LIED / MISLED creditors = NOMINEE CAN PETITION FOR BANKRUPTCY
    - - If bankrupt is seen as culpable / dishonest (e.g. tried to hide assets from creditors OR attempted defraud) can be more sanctions
      - ORDER FOR BANKRUPTCY CAN BE PAID IN 3 WAYS
        
        BY DEBTOR - can apply online to an adjudicator appointed by secretary of state for an order of bankruptcy.
        App granted if adjudicator finds debtor unable to pay debts
        
        BY UNSECURED CREDITOR(s) who is (together) owed at least £5,000 = can band together present petition for order of bankruptcy to bankruptcy court
        
        BY SUPERVISOR OF AN IVA = petition for debtors bankruptcy if debtor breached terms of IVA
        
        If bankruptcy order is made an official receiver who is a civil servant APPOINTED - official receiver will serve as TRUSTEE in bankruptcy UNLESS debtors creditors CHOOSE OWN TRUSTEE
        
        MOST of BANKRUPTS ASSETS, known as BANKRUPTS ESTATE will vest automatically in the trustee in bankruptcy
        The bankrupt will not have to fill out usual formalities to transfer assets
        
        could also keep salary he makes SUBJECT TO trustee applying for an income payments order IF SALARY EXCEEDS the amount needed for the reasonable needs of bankrupt and his family
        
        SPECIAL RULES FOR BANKRUPTS HOME - although bankrupts interest in his home will pass to trustees MAY BE OTHER PEOPLE WHO HAVE LEGAL / EQUITABLE INTERESTS IN HOME
        
        ALSO if child under 18 at property
        
        IF ANY APPLY = TRUSTEE NEEDS COURT ORDER TO SELL HOME
        
        AFTER A YEAR = interest of creditors will take precedence over any other interests AND TRUSTEE ABLE TO GET ORDER FOR SALE
        
        MOST SITUATIONS BANKRUPTCY AUTOMATICALLY DISCHARGED AFTER ONE YEAR - at this point bankrupt can start again, free from debts not paid
        
        HOWEVER DURING BANKRUPTCY PERIOD - restrictions to protect creditors and prevent bankrupt from further financial difficulties
        
        DURING YEAR BANKRUPT CANNOT apply for credit over certain amount
        
        act as comp dir / be partner
        
        trade under another name unless bankrupt discloses their bankruptcy
        
        bankrupts credit rating adversly affected
        
        CULPABLE BANKRUPT = caused bankruptcy by their own dishonesty / negligence / recklessness = BANKRUPTCY LAST BETWEEN 2-15 YEARS + bankrupt can be subject to restrictions which last even after bankruptcy has been discharged
  - - - RECEIVERSHIP (FIXED ASSET) = (not true insolvency procedure BUT often leads to insolvency)
        
        appointment of receiver usually lead to insolvnecy
      - ADMINISTRATION = procedure which allows for reorganisation of a company or the realisation of its assets usually for insolvent companies BUT POSSIBLE FOR SOLVENT COMP TO ENTER ADMINISTRATION
        
        main advantage MORATORIUM applies = prevents creditors from taking action against comp to enforce their claims = so gives the administrator a breathing space to try and reorganise comp OR make orderly sale of Assets/Comp
        
        administrator who MUST BE LICENCED insolvency practitioner acts in interests of creditors as whole
        
        ADMINISTRATOR DOES WHATS BEST FOR ALL CREDITORS WHILST RECEIVER ONLY ACTS FOR CREDITOR WITH A SECURED DEBT
        
        AIM OF ADMIN = rescue comp OR if impossible then better result for creditors as a whole than would occur if comp went into liquidation OR if that's not possible
        
        comp can go into admin 2 ways
        
        COURT ORDER = formal application in court with a hearing
        
        FILING DOCS AT COURT = requires the filing of certain documents = can be filed by comp / dir / holder of qualifying floating charge
        FLOATING CHARGE IF = power for floating charge holder to appoint administrator / administrative receiver
        once papers filed administrator appointed
        
        ADMINISTRATOR WILL - investigate the position of the company and will come up with proposals on how to proceed - have power to = take control of comp property / bring or defend legal proceedings on behalf of comp / carry out company's business / remove or replace directors / etc
        usually present proposals to companys unsecured creditors for approval
        HOWEVER SOMETIMES - comp managers prearrange sale and administrator immediately sells on arrival = PREPACK ADMINISTRATION = controversial = not much participation by unsecured creditors who often go largely unpaid = PROBABLY NOT TESTED
      - CVA (like IVA) - compromise between company and creditors with insolvency practitioner (nominee) = if approved by necessary majority of creditors = BIND ALL UNSECURED CREDITORS - HOWEVER NOT BIND SECURED OR PREFERENTIAL CREDITORS UNLESS THEY AGREE
        
        comp can propose CVA UNLESS IN ADMINISTRATION OR LIQUIDATION = which case administrator or liquidator can propose a CVA
        
        proposal should nominate an insolvency practitioner to supervise implementation(the nominee)
        
        proposers of CVA will prepare document setting out proposals with assistance of nominee
        
        small company can apply to court fo moratorium (small company dont have to know for exam = turnover not much more than £10M and balance sheet not much more than £5M + no more than 50 employees)
      - LIQUIDATION IS FINAL UNLIKE OTHER PROCEDURES WHERE COMP CAN STILL SURVIVE
        = COMPwill be wound up and struck off register at companies house (liquidation and winding up used interchangeably)
        
        liquidator appointed
        
        collects companys assets and will sell any non-cash assets for cash
        
        distribute money to creditors in order laid down by statute
        
        comp is dissolved
        
        VOLUNTARY
        
        MEMBERS = not part of insolvency - comp ceases trading wants to wind comp down - dir can retire but members difficult
        
        procedure starts with stat dec sworn by dir
        
        stat dec will confirm that after the dir have made full inquiry into comp affairs = satisfied comp able to pay its debts in full (and any interest) within a period of not more than 12 months after the commencement of winding up
        =protects creditors = if made without reasonable grounds dir can be liable to FINE / IMPRISONMENT
        
        5 weeks of stat dec members must pass a special resolution that company should be wound up and appoint an insolvency practitioner to be the liquidator
        
        liquidator take over powers and has DUTY TO ACT IN GOOD FAITH + EXERCISE POWER WITH REASONABLE CARE AND SKILL AND FOR THEIR PROPER PURPOSE
        
        liquidators appointment advertised in London gazette + filed at companies house
        
        final accounts sent to creditors and members + final return filed at Comp House and COMP DISSOLVED 3 MONTHS LATER
        
        CREDITORS = no stat dec of solvency = comp goes into this after dir realise that business no longer viable and it will be UNABLE to PAY ALL its CREDitors on winding up
        
        procedure starts with members SPECIAL RESOLUTION to wind up company and members nomination of an insolvency practitioner to act as liquidator (cred can nominate own liquidator if disagree)
        
        liquidation proceed same way as for MEMBERS VOLUNTARY LIQUIDATION - BUT - LIQUIDATOR NEED PAY CREDitors in stat order as NOT ALL creditors will be repaid
        
        COMPULSORY - usually started with creditors presenting winding up PETITION to COURT because comp not paying debts to them
        
        court schedules winding up hearing - petitioner must serve copies and notice of hearing on company it must also advertise perition
        
        at hearing court can make winding up order / dismiss / adjourn petition
        
        will make order IF 1 or more grounds met
        
        most commonly used gound is COMP NOT ABLE TO PAY DEBTS
        
        court assess evidence BUT AUTOMATIC PRESUMPTION of insolvency if evidence is an unsatisfied statutory demand OR unsatisified judgement debt UNTIL PROVED OTHERWISE
        
        STATUTORY ORDER
        
        expenses of winding up paid first (includes liquidators fees + professional advisors)
        
        preferential creditors (employees for holiday pay + wages during last 4 months up to maximum which varies with inflation BUT LOW around £800)(also amounts owed to HMRC for VAT, pay as you earn, NI also preferential)
        
        Floating charges
        
        Unsecured creditors
        (RING FENCING - dont need to know)
        
        Members
        
        IF NOT ENOUGH MONEY FOR CREDITORS IN A CLASS = MONEY SHARED AMONGST THEM ACCORDING TO AMOUNT OWED
        
        ANY CREDITOR WITH FIXED CHARGE WILL BE PAID FROM PROCEEDS OF SELLING SECURED ASSET ON WHICH CHARGE FIXED
        
        IF ASSET SOLD FOR MORE THAN OWED SURPLUS AVAILABLE TO OTHER CREDITORS + IF LESS CHARGE HOLDER BECOMESUNSECURED CREDITOR FOR UN-REPAID AMOUNT