»Ê¹ÚÌåÓýapp

Winding up

Under Part IV Insolvency Act 1986, a company may be wound up by:

• order of the court, or
• voluntarily by resolution of the company.

After the winding-up order or resolution, a liquidator is appointed. All creditors entitled to prove their debts may do so. For companies wound up by order of the court, the Official Receiver acts as liquidator until a liquidator is appointed. In certain circumstances the Official Receiver is appointed as liquidator. »Ê¹ÚÌåÓýapp term ‘liquidatorâ€� in this chapter includes ‘the Official Receiver by virtue of his office becoming the liquidator of the companyâ€�.

A ‘members� voluntary winding-up� is a voluntary winding-up in which the directors make a statutory declaration that the company will be able to pay its debts in full within twelve months of the commencement of the winding-up. If no such declaration is made, the winding-up is known as a ‘creditors� voluntary winding-up�.

In a ‘members� voluntary winding-up�, the company has been declared solvent and able to pay all tax due in full, irrespective of any question of preferential year. A ‘creditors� voluntary winding-up� is not necessarily a sign of insolvency. If there is reason to believe the winding-up is on some other grounds, the company’s solvency should be determined.

Striking-off of defunct company

A company may be struck off the Companies Register by the Registrar without winding-up proceedings if he has reasonable cause to believe it is not carrying on business or in operation â€� CA06/S1000, formerly CA85/S652. This sometimes occurs inadvertently, where the company has moved without notification and it does not respond to notices. »Ê¹ÚÌåÓýappre is a procedure for restoration on application of a member or creditor of the company, but this normally requires court intervention.

Voluntary striking-off and dissolution

This procedure was introduced by the Deregulation and Contracting Out Act 1994 by the insertion of sections 652A to 652F into CA85. »Ê¹ÚÌåÓýapp provisions are now at CA06/S1003 to S1007. »Ê¹ÚÌåÓýapp measure was introduced as a simplification for private companies that are not trading and are no longer needed, perhaps because directors wish to retire without the appointment of successors, or a subsidiary is no longer required.

It is not an alternative to winding up where creditors are involved. »Ê¹ÚÌåÓýapp essence of a winding-up is that it makes orderly provision for the conclusion of a company’s affairs and distribution of assets. It is not appropriate to refer to striking-off and dissolution as an ‘informal winding-upâ€�.

CTM36200 onwards gives more information about dissolution of companies.