Commencement of winding up meaning

Where it is proposed to wind up a solvent company voluntarily When a solvent company is to be wound up voluntarily, the directors may, at a board meeting, make a statutory declaration of solvency confirming that, after a full enquiry into the company’s affairs, they hold the view the company can pay all its debts in full, together with interest at the official rate, within no more than 12 months from the commencement of the winding-up. See Practice Notes: What is a members’ voluntary liquidation and when is it typically used? MVL—the information and documents to be provided to the liquidator by the company It should be noted that if the directors make such a statutory declaration, the company proceeds by way of a members’ voluntary liquidation (MVL). Where no declaration is made, the company instead enters a creditors’ voluntary liquidation. See Practice Notes: Placing a company into MVL What is a statutory declaration of solvency...

Obtain necessary information to draft statement in support of application for validation order: a search of the company’s records a duplicate of the winding-up petition particulars of the debt and, if contested, particulars of the dispute current accounts and forecasts, with bank account statements information on the intended dispositions (including continuing trading where relevant) and/or transfers, together with supporting documentation if the asset is a property, identification of the property, including title numbers valuation evidence where any asset is to be disposed of See Practice Note: Validation orders—dispositions of property after commencement of winding up. Draft: a supporting witness statement from a director or officer of the company who is closely acquainted with the company’s affairs and financial position. Where appropriate, corroborating evidence from the company’s accountant should also be provided...

Bourne (as liquidator of MM Apartment Letting Ltd) and another company v Manukyan and another [2024] EWHC 832 (Ch) What are the practical implications of this case? The judgment acts as a helpful illustration of the principles the court will apply and consistently enforce in situations of this nature where numerous unexplained transfers have been made from a company’s bank account ahead of its liquidation, and the sole director fails to provide an adequate justification. What was the background? The applicant liquidator sought relief against Mr Manuk Manukyan, the sole director of MM Apartment Letting Ltd (the ‘Company’), under IA 1986, ss 212, 238 or 239 in respect of: a dividend declared and paid in June 2018 after the deemed commencement of the winding up petition, where the payment was effected without a validation order; and various payments between 14 August 2017 and 13 April 2018 made by the Company out of its bank account before its winding up, for which no...

In this issue: Key R&I law developments Restructuring Corporate insolvency processes Personal insolvency Insolvency litigation Directors and insolvency International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New content New Q&As Key R&I law developments Insolvency Service publishes monthly insolvency statistics for February 2025 The Insolvency Service has released its February 2025 monthly statistics, covering both company and personal insolvencies throughout England and Wales. The figures indicate there were 2,035 corporate insolvencies in the period, 3% above January 2025 yet 7% below the same month in 2024. For individuals, January 2025 recorded 10,147 insolvencies in total, 4% higher than in January 2025 and 5% lower than February 2024. See: LNB News 18/03/2025 27. Companies House publishes two guidance documents on identity verification Companies House has issued two guidance documents on identity verification. The first sets out who must verify their identity, the verification...

In this issue: Key developments and horizon scanning Transferring property Property management Leasing property Property in Scotland Additional property updates this week Daily and weekly news alerts New and updated content Trackers New Q&As Key developments and horizon scanning Elements of the Leasehold and Freehold Reform Act 2024 (LFRA 2024) are now in effect from 24 July 2024. These are section 113 (controls over remedies for arrears of rentcharges), section 117 (recovery of legal costs etc via the service charge), section 118 (repeal of section 125 of the Building Safety Act 2022 (BSA 2022)) and section 119 (higher-risk and relevant buildings: insolvency-related notifications). The balance of LFRA 2024 will be commenced by regulations. We have released a new Practice Note on LFRA 2024 (see New and updated content below) and refreshed our materials on rentcharges and BSA 2022. HM Land Registry (HMLR) has amended its guidance to reflect commencement of LFRA 2024. See: LNB...

FORTHCOMING DEVELOPMENT : The Pensions (Extension of Automatic Enrolment) (No. 2) Bill secured Royal Assent on 18 September 2023, becoming the Pensions (Extension of Automatic Enrolment) Act 2023 (the Act), and was published on 19 September 2023. The Act confers powers on the Secretary of State for Work and Pensions to make regulations to: lower the minimum age at which otherwise eligible employees must be automatically enrolled and re-enrolled into a pension scheme by their employers; remove the Lower Earnings Limit from the qualifying earnings band so that contributions are calculated from the first pound of earnings; and revise the requirements for the annual review of the qualifying earnings band. Adjustments to automatic enrolment eligibility will proceed following a consultation on the detailed implementation method and timing. The commencement of section 1 of the Act is set to be ‘on such day or days as the Secretary of State may by regulations appoint’. For further information, see: DWP press release, Work...

The Insolvency (Scotland) (Receivership and Winding up) Rules 2018 The Insolvency (Scotland) (Receivership and Winding up) Rules 2018 (ISRWR 2018), SSI 2018/347, were presented to the Scottish Parliament on 14 November 2018 and took effect from 6 April 2019. As a result, these Rules altered the procedure for members’ voluntary liquidations (MVLs) in Scotland. Later, the Insolvency (Scotland) (Receivership and Winding Up) (Amendment) Rules 2021 (ISRWAR 2021), SI 2021/1025, were placed before the Scottish Parliament on 9 September 2021 and commenced on 1 October 2021. These subsequent Regulations amend the original Rules. Accordingly, this Practice Note addresses the law, procedures and practice governing Scottish MVLs from 6 April 2019 onwards, as contained in ISRWR 2018, SSI 2018/347, Part 3, and ISRWAR 2021, SI 2021/1025, Part 2. What is an MVL? An MVL is the procedure whereby a company’s members pass a special resolution to cease trading and appoint a liquidator to return the company’s capital to shareholders, culminating in the company’s dissolution. It is suited to solvent...

Statutory declaration of solvency A company proceeds into voluntary liquidation once its members approve a special resolution to do so. For further detail, see Practice Note: What is a members’ voluntary liquidation and when is it typically used? Before members can vote on that resolution, the directors must determine whether the company will discharge its debts in full, together with interest at the official rate (as defined in section 251 of the Insolvency Act 1986 (IA 1986)), within no more than 12 months from the commencement of the winding-up. If that test is met, the company may enter a members’ voluntary liquidation (MVL). If not, it should go into creditors’ voluntary liquidation (CVL). For more information, see Checklist: Directors' due diligence questionnaire and guidance before swearing a statutory declaration of solvency for a members' voluntary liquidation. The statutory declaration of solvency required under IA 1986, s 89, and needed to place a company into an MVL, is a formal declaration sworn on oath before a commissioner for...

This Partnership Agreement is entered into on [ insert date ] Parties [ insert name of partner ], of [ insert address of partner ] [ insert name of partner ], of [ insert address of partner ] Background The Partners intend to operate [ insert nature of business or profession or trade ] jointly as a partnership, following and being bound by the terms laid out within this agreement...

This limited partnership Agreement is entered into on [ insert day and month ] 20[ insert year ] Parties [ insert name of general partner ] of [ insert address ] (the General Partner); and Each of the persons named in Schedule 1, Part B. BACKGROUND The Limited Partnership is registered as a limited partnership and designated as a private fund limited partnership in England under the LPA 1907 with number LP [ insert number ]. The General Partner has agreed to act as the general partner of the Limited Partnership and to manage the business of the Limited Partnership, and the Limited Partners have agreed to make Contributions to the Limited Partnership on the terms set out below. The General Partner and the Limited Partners intend that the Limited Partnership will carry on the Business and agree to regulate the affairs of the Limited Partnership on the terms set out below. ...

This Limited Partnership Agreement is entered into on [ insert day and month ] 20[ insert year ] by and between the parties set out below. Parties [ insert name of general partner ] of [ insert address ] (the General Partner); and Each of the persons whose names are listed in Schedule 1, Part B. BACKGROUND The Limited Partnership has been registered in England as a limited partnership under the LPA 1907 with number LP [ insert number ]. The General Partner has agreed to act as the general partner of the Limited Partnership and to manage, operate and administer the business of the Limited Partnership, and the Limited Partners have agreed to make Contributions to the Limited Partnership on the terms set out below. The General Partner and the Limited Partners wish the Limited Partnership to carry on the Business and agree that the affairs of the Limited Partnership shall be regulated in accordance with...