An overview of how business interruption insurance policies have been interpreted in the context of the coronavirus pandemic.
Documents to download
-
Compulsory liquidation of a company (2 MB, PDF)
Compulsory liquidation (or winding up) is a legal process by which a liquidator is appointed by the court to wind-up the affairs of a limited company. A company is said to be insolvent if it has insufficient assets to cover its debts or is unable to pay its debts as and when they fall. It is the directors’ responsibility to know whether the company is trading whilst insolvent; they can be held responsible for continuing to trade in that situation (the offence of wrongful trading).
A company (or a limited liability partnership) can be put into compulsory liquidation by order of the court if it cannot pay its debts, usually on the petition of a creditor. A company is considered unable to pay its debts if a creditor presents a written demand for payment (known as “a statutory demand”) and it fails to pay the debt or secure a repayment plan with the creditor.
Compulsory liquidation involves the collection and realisation of company assets into cash and the distribution of this money to the company’s creditors (who often will not be paid in full). How long liquidation takes will depend on the complexity of the case. Once the process has been completed, with the liquidator sending his final accounts to the Registrar of Companies, the company will be dissolved – it will cease to exist.
This Commons briefing paper provides a summary of the compulsory liquidation process in England, Wales and Scotland. It includes information on the impact of liquidation on creditors, employees and company directors.
It should be noted that there are separate Library briefing papers on “Company Administration” (CBP 4915) and “Pre-pack administrations” (CBP 5035).
Documents to download
-
Compulsory liquidation of a company (2 MB, PDF)
Related posts
-
-
This paper collates data on the number of applications and total support provided under the UK Government coronavirus business support schemes. The attached excel spreadsheet allows users to view data by Parliamentary constituency.
-
The National Security and Investment Bill 2019-21 was announced in the Queen’s Speech on 19 December 2019. It was introduced in the House of Commons on 11 November 2020. Its Second Reading took place on 17 November 2020, with remaining stages scheduled for Wednesday 20 January 2021.