Creditors' voluntary liquidation
A director can choose a creditors' voluntary liquidation if:
- the company can't pay its debts (it's insolvent)
- enough shareholders agree
This means the company will stop trading and be liquidated (wound up).
Shareholders can voluntarily liquidate the company by voting and passing a resolution to stop trading.
Once the resolution has been passed, there are 3 steps you must follow:
Appoint an authorised insolvency practitioner as liquidator to take charge of liquidating the company.
Send the resolution to Companies House within 15 days.
Advertise the resolution in The Gazette.
Your responsibilities as a director will change.
Hold a creditors' meeting
You must have a meeting with all the creditors within 14 days of the winding-up resolution.
At least one of the following must also be there:
- another director
- the company secretary
- the liquidator
You must tell the creditors about the meeting at least 7 days before it happens and advertise it in The Gazette.
At the meeting your company's creditors can:
- question company directors about the company's failure
- suggest an alternative liquidator
You must present the statement of affairs at the meeting. This gives details of the company's situation and assets. Use form 4.4(Scot) in Scotland.
After the meeting, give the statement to the liquidator who will send it the Accountant in Bankruptcy.