Compulsory liquidation
Compulsory liquidation

The following Property practice note provides comprehensive and up to date legal information covering:

  • Compulsory liquidation
  • General
  • Petition
  • Effect of a winding-up order
  • Avoidance of property dispositions
  • Decisions
  • Powers and duties
  • Remuneration and financial matters
  • Resignation and discharge
  • Distribution
  • More...

Coronavirus (COVID-19): the coronavirus pandemic has caused the UK to expedite new insolvency provisions, both of a temporary and permanent nature. These are contained in the Corporate Insolvency and Governance Act 2020, which received Royal Assent on 25 June 2020. Amongst other things, the Act introduces temporary prohibitions on issuing winding up petitions. See: Coronavirus (COVID-19)—implications for property — Property Insolvency and Assessing the impact of the Corporate Insolvency & Governance Bill on property.

General

Liquidation (sometimes called winding up) is the process by which a company and its affairs are brought to an end and its assets distributed to creditors and members as prescribed by law. It is governed by:

  1. the Insolvency Act 1986 (IA 1986)

  2. the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024

Liquidation of companies incorporated in England and Wales is subject to the jurisdiction of:

  1. the Chancery Division of the High Court, or

  2. where the company has a paid-up share capital not exceeding £120,000, designated county courts

Liquidation is supervised by:

  1. the Official Receiver, or

  2. a liquidator, who must be a qualified insolvency practitioner. In this case the company must have enough assets to pay the liquidator's fees

Liquidation may be:

  1. voluntary—where initiated by resolution of the company's members

  2. compulsory—where the company is wound up by the court

This Practice Note deals only with compulsory liquidation.

Petition

Compulsory liquidation is where the court makes

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