If a company is insolvent then sometimes entering a formal insolvency procedure is unavoidable or even considered to be the best course of action given the circumstances of the company concerned.
A liquidator is appointed to a company either by the courts through Compulsory Liquidation or voluntarily from the instigation of its directors. The main aim of a liquidators appointment is to bring the company’s life to an end, to maximise the return to the company’s creditors and to seek its eventual dissolution.
A compulsory liquidation is usually initiated by a creditor by petitioning the court for a wind up order. There are many grounds in which a petition may be sought. The most common are:
- the company is unable to pay its debts
- the company has passed a special resolution to wind up
- the court is of the opinion that it is just and equitable to wind the company up
A company is considered to be in a position to be unable to pays its debts if a statutory demand is issued and not paid, if an execution of a judgement debt is unsatisfied or if the court is satisfied the company in unable to satisfy its debts.
For more information or to arrange your initial free consultation please telephone Mark Botwood on (01902) 393007.