Liquidation meaning

Background Statutory declarations form an essential component of insolvency processes, arising most frequently when a company proceeds by members’ voluntary liquidation (MVL) under section 89 of the Insolvency Act 1986 (IA 1986), and also when administration is commenced by an out-of-court appointment in accordance with the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 3.17. Section 20 of the Statutory Declarations Act 1835 (SDA 1835) sets out the required form of the declaration, as contained in the Schedule to that Act. Under SDA 1835, s 19, a fee is payable, the amount of which is fixed by the Commissioners for Oaths (Fees) Order 1993, SI 1993/2297. The fee is £5 for taking an affidavit, declaration, or affirmation, together with an additional £2 for each exhibit referred to therein that must be marked, or for every schedule that is required to be marked. Save for prescribing the template of the statutory declaration and making provision for the relevant fees, no further formal requirements are stipulated. Accordingly, the...

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...

This Checklist outlines the position in relation to a creditors’ voluntary liquidation (CVL) with effect from 6 April 2017. Notifications The appointed liquidator must provide the registrar of companies with the following: a copy of the statement of affairs, to be delivered within five business days after the conclusion of the decision procedure or deemed consent procedure relating to the liquidator’s appointment a copy of the notice of appointment of liquidator, to be sent within 14 days of the appointment The registrar of companies should be notified using Form 600CH. If the liquidator chooses to move the company’s registered office to their business address, they should also submit to the registrar of companies a copy confirming the change of registered office (if this has not already been filed). In February 2014, Companies House issued guidance answering frequently asked questions about insolvency filings at Companies House (most recently updated on 10 March 2022). The guidance contains a list of the...

Procurement process flowchart This Procurement process flowchart outlines the sequence a procurement might follow and highlights the factors to weigh and the considerations involved to maintain a transparent and appropriate procedure. It further points to the Precedents on hand to support you through the procurement steps. This Flowchart serves as a worked illustration and is not meant to be exhaustive. While organisations may adopt quite varied approaches, it offers a useful baseline or point of reference. Any contract value amounts shown here are for demonstration purposes only...

This Checklist is applicable when acting for the mortgagee in relation to the taking of a ship mortgage and where the security will be registered in the UK. Request a Transcript of Registry from the UK Ship Register to confirm the vessel’s security status. A charge applies for this and for several other documents noted below; the complete schedule can be found on the UK Ship Register website, and a full list is available there. The mortgagee should verify that the owner holds clear, unencumbered legal title to the ship and that their ownership has been correctly recorded, and confirm that it has been properly registered. Perform a Register of Companies search to confirm the owner’s incorporation in England and Wales. Ascertain whether any mortgages or charges concerning the ship are filed against the owner pursuant to Section 859A of the Companies Act 2006 (CA 2006), and confirm registrations relate to the ship...

Flowchart This flowchart offers a concise overview of the tax considerations that could prompt a company to select a specific route to demerger. The terms and expressions used in the flowchart are set out in the Practice Notes on demergers, as follows: Demergers—an introduction to the tax issues Statutory demergers Capital reduction demergers Liquidation demergers For a PDF version, please click below...

In Downtul Ltd [In Liquidation] v Companies Act [2025] IEHC 358, the Irish High Court imposed restrictions for a period of five years on two directors, after determining that they did not act prudently or have proper regard to the interests of Downtul Limited (the Company) as a distinct entity within a complex corporate arrangement. The decision underlines the intricate nature of directors’ obligations in group scenarios and the need to prioritise the interests of each separate company. As a result of the restriction order, the two individuals—each currently sitting on the boards of more than 100 Irish companies—are barred from acting as company directors for five years unless the relevant company has a nominal share capital of at least €100,000 (or €500,000 where the entity is a public limited company or an unlimited company). Background The individuals were directors of the Company, which leased a commercial premises later occupied and run as a Starbucks café by another company, Atercin. They also served as directors of Atercin...

Christopher Purkiss (as liquidator of Ethos Solutions Limited) v Tim Kennedy and others [2025] EWCA Civ 268 Ethos Solutions Limited (the Company) ran a disguised remuneration arrangement under which sums were channelled to an employee benefit trust (EBT) without withholding income tax or NICs. The EBT’s trustee allocated funds into sub-trusts for the respondents and, when asked, advanced the amounts to them as discretionary loans. On 4 December 2012, HMRC issued determinations, holding the Company liable for income tax and NICs of c.£2m arising from payments made to the EBT in the 2008‑09 and 2009‑10 tax years. On 18 December 2012, the Company entered creditors’ voluntary liquidation, making no remittances to HMRC and taking no steps to appeal. On 9 January 2013, HMRC lodged a proof of debt totalling c.£2m with respect to those same EBT payments, as claimed therein...

In this issue: Standard form contracts Building safety Expert witnesses Construction industry news Daily and weekly news alerts New and updated content Construction trackers Standard form contracts CLLS publishes 2024 edition of Letter of Intent The CLLS has released the refreshed 2024 edition of its Letter of Intent. Our commentary reviews the revisions made. See News Analysis: City of London Law Society publishes 2024 edition of Letter of Intent. Court refuses declaratory relief in JCT termination payment dispute (Shaylor v Valesecure) In Shaylor Group Ltd (in administration) v Valesecure Property Ltd (in liquidation) [2024] EWHC 750 (TCC), the Technology and Construction Court declined to issue declarations regarding the contractor’s right to payment after the termination of a JCT-based contract. In doing so, the court explored noteworthy issues of contractual interpretation, including the methodology for assessing sums owed to the contractor post-termination and the impact of an ineffective assignment by the employer. See News Analysis:...

What is a CVA? A company voluntary arrangement (CVA) is a form of insolvency that permits a company to enter a binding agreement with its creditors to compromise unsecured debts or otherwise agree how its affairs are handled. The directors continue to run the business, under the oversight of an insolvency practitioner. Retailers, particularly those with extensive property portfolios, frequently adopt so‑called ‘landlord CVAs’ to reset rental commitments and shut loss‑making stores. This note outlines how property law and landlord and tenant considerations may emerge under such a CVA. It highlights provisions commonly included in CVAs and explains how they tend to work in practice. Nevertheless, each CVA will vary according to the precise terms proposed. It is therefore vital to examine the CVA proposal carefully to assess its effect on creditors. This note does not provide detailed guidance on the mechanics of approving and implementing a CVA. For Practice Notes addressing the CVA procedure, see: Company voluntary arrangements—an introductory guide The CVA proposal and...

The resolution to wind-up A company can move into voluntary liquidation only if one of the following applies: its fixed duration has ended, or an event specified in its articles as triggering liquidation has occurred, and the company has approved an ordinary resolution to wind up; or it passes a special resolution to be wound up voluntarily. See: 97 Notice of meeting to pass ordinary or special resolution to wind up: Encyclopaedia of Forms and Precedents [1441] 103 Special resolution to wind up and appoint liquidator: Encyclopaedia of Forms and Precedents [1452] The former practice of proceeding by extraordinary resolution is no longer available under the Companies Act 2006. Where the directors make a declaration of solvency under section 89 of the Insolvency Act 1986 (IA 1986), the company may proceed by way of a members’ voluntary liquidation (MVL). For further information, see Practice Note: What is a members’ voluntary liquidation and when is...

This Practice Note sets out the particular rules governing VAT on costs that fall to be the subject of either summary or detailed assessment before the High Court. The applicable provisions are contained in CPR PD 44. Entitlement to This is addressed at CPR PD 44, para 2.3 through to CPR PD 44, para 2.6. The party seeking recovery of costs bears responsibility for ensuring that VAT is claimed only if, and only to the extent that, it cannot recover from HMRC the VAT it has incurred (CPR PD 44, para 2.4). if the VAT is recoverable from HMRC, it should not be included in a claim for costs if only a proportion of the VAT is recoverable from HMRC, include only that proportion which is not recoverable from HMRC in the claim for costs The legal adviser’s VAT registration number must appear in a prominent position at the head of every statement, bill of costs, fee sheet, account or voucher...

INSOLVENCY ACT APPLICATION NOTICE Case No: [ insert case number ]. Court: High Court (Business and Property Courts, Insolvency and Companies List (ChD)) OR Business and Property Courts in [ insert location ] OR County Court at [ insert location ] (Business and Property Work). In the matter of [ insert company’s name ] and the Insolvency Act 1986. Parties: [ Insert Applicant(s) ] v [ Insert Respondent(s) ]. Under IR 2016 r 18.23. Parties and addresses: Applicants [ names/addresses ]; Respondents [ names/addresses ]. Application relates to [ details ]. Judge: [ level ]. Venue: [ court/hearing centre ]. Ref: [ number ]. Orders sought: Fix remuneration at £[ insert sum ] plus VAT; disbursements £[ insert sum ]. Costs to be an expense of the [ liquidation/administration ]. Any further order or relief the court considers appropriate. Grounds: witness statement of [ name ], dated [ date ]. Service/notice: [ names/addresses, if any, or none ]. Address for...

This deed is dated the [ INSERT DAY ] of [ INSERT MONTH AND YEAR ]. Parties The persons whose particulars are set out in the Schedule (the Indemnifiers); and [ Insert names of the Joint Liquidators ] of [ insert name and address of the Joint Liquidators’ firm ] (the Joint Liquidators) BACKGROUND [ Insert name of the company ] (the Company) was incorporated in England and Wales under company number [ insert number ]. [ Insert names of the joint liquidators ] are to be appointed as Joint Liquidators of the Company (the Appointment) by the members via written resolution. In consideration of the Joint Liquidators accepting the Appointment, the Indemnifiers agree to indemnify the Joint Liquidators, together with the members and employees of the Joint Liquidators’ firm, in the manner set out herein...

Letter for sub-contractor to send to employer in the event of main contractor insolvency [ [ Sub-contractor’s headed notepaper ] OR [ Sub-contractor’s address ] ] [ contact name, job title and department ] [ name of employer company ] [ address ] Dear [ contact name ] [ name of project ]—[ name of main contractor ]—Insolvency We believe that [ name of main contractor ] [ has entered into administration OR is in liquidation OR has commenced a moratorium OR other ] ....

When one company advances funds to another, the contractual provisions govern any restriction on repaying the loan before the ten-year period first contemplated. Should the lending company enter liquidation or administration, that circumstance, by itself, does not alter the contract’s terms. The office-holding insolvency practitioner should nevertheless review the agreement to determine whether it permits earlier repayment, or repayment on alternative terms, if the lending company goes into liquidation or administration. Although that may appear improbable, it remains possible, and the officeholder ought to explore every avenue to secure accelerated repayment of the borrowing. Absent an express clause to the contrary, the insolvency of the lender does not, of itself, accelerate the debt, and timing remains governed by the bargain. It would seem that the office-holding insolvency practitioner holds an appointment that must remain open for at least ten years before the loan can be discharged and a dividend distributed to creditors...

The Industrial and Provident Societies Act 1965 (IPSA 1965) has been revoked. The Co‑operative and Community Benefit Societies Act 2014 (CCBSA 2014) now regulates how registered societies are formed and run. Per CCBSA 2014, s 1(1)(b), ‘registered society’ covers, via CCBSA 2014, s 150, societies which, immediately before 1 August 2014, were registered or regarded as registered under IPSA 1965 at that time...

Insolvency Rules 2016 (IR 2016), SI 2016/1024, Part 14 Part 14 of the Insolvency Rules 2016 (SI 2016/1024), which sets out how creditors’ claims are dealt with, also operates in a members’ voluntary liquidation (MVL) by reason of r 14.1(1). That rule confirms that this Part applies to administration, winding up and bankruptcy proceedings, without any restriction confining its operation to insolvent liquidations. What amounts to a provable debt in a winding up (and equally in administration and bankruptcy) is defined by r 14.2(1). Save as otherwise provided in that rule, every creditor’s claim is provable as a debt against the company or the bankrupt, whether the liability is present or future, certain or contingent, ascertained or recoverable only in damages. For further guidance, see Practice Note: Future debts, contingent debts, secured debts...