The effect of a company voluntary winding-up—the position under The Insolvency (England and Wales) Rules 2016
Produced in partnership with Karl Anderson of 4 Stone Buildings
The effect of a company voluntary winding-up—the position under The Insolvency (England and Wales) Rules 2016

The following Restructuring & Insolvency guidance note Produced in partnership with Karl Anderson of 4 Stone Buildings provides comprehensive and up to date legal information covering:

  • The effect of a company voluntary winding-up—the position under The Insolvency (England and Wales) Rules 2016
  • The effect of CVL on the company
  • The effect on the company’s officers
  • The effect on the company’s members
  • The effect for the company’s employees

This Practice Note sets out the position from 6 April 2017.

The effect of CVL on the company

The process of liquidation will lead to the dissolution of the company and it being removed from the register. This is its most serious effect from the company’s perspective. Its assets will be collected in and distributed by way of dividends to the creditors and, if possible, the members.

From date of the resolution to wind-up, the company must cease its business activities except insofar as continuing them is required for a beneficial winding-up.

It should be noted, though, that the corporate status of the company (and its separate legal personality) remains in place until dissolution and does not die with the passage of the resolution.

This must mean that, unless specifically empowered by statute to act in his own name, the liquidator of a company in voluntary liquidation must act in the name of the company unless Insolvency Act 1986 (IA 1986) or the Insolvency (England and Wales) Rules 2016, SI 2016/1024 specifically empowers him to act in his own name.

The shares of a company which has entered voluntary liquidation cannot be transferred without the sanction of the liquidator, and any alteration in the status of the company’s members is void.

As the liquidator is bound to investigate whether there have been any transactions at