Liquidation and Insolvency
(Scotland) - GBW1(s)
Contents
 Back
to top
Introduction
This booklet is a simple guide to liquidation
and other insolvency procedures. It summarises some of the
rules that apply to corporate voluntary arrangements, moratoria,
administrations , receivers, voluntary liquidations, compulsory
liquidations and EC regulations. Please also refer to the
relevant legislation, which you will find in the Companies
Act 1985 (as amended in 1989 and later), the Insolvency Act
1986, the Insolvency Rules (Scotland) 1986, Insolvency Act
2000, the Enterprise Act 2002, the Insolvency (Scotland) Amendment
Rules 2002, the Insolvency (Scotland) Amendment Rules 2003,
the Insolvency (Scotland) Regulations 2003, the Act of Sederunt
(Sheriff Court Company Insolvency Rules 1986) Amendment 2003,
and Council Regulation (EC) No 1346/2000.
The winding up, liquidation, insolvency,
cessation of payments and similar procedures that apply to
a PLC also apply to a European company, ‘Societas Europaea’
(SE) registered in GB. For general information on SEs, please
see our booklet, ‘The European Company: Societas Europaea
(SE)’.
Please remember that if your company
is considering liquidation, or any other measures to deal
with insolvency, you should seek appropriate professional
advice or consult an authorised insolvency practitioner.
We can only assist with queries relating to filing statutory
documents with the Registrar of Companies.
Back
to top
CHAPTER 1
General information
1. What are insolvency proceedings?
These are formal measures taken to deal with company debt.
There are many different types of company insolvency proceedings.
All are covered in this booklet.
Please note: the initiation
or termination of insolvency procedures involving a European
company (SE), or any decision to continue operating the SE,
must be notified to Companies House on Form SE82(1)(b). This
is in addition to the other requirements mentioned in this
booklet. For more information about SEs, please see our booklet,
‘The European Company: Societas Europaea (SE).
2. Do insolvency proceedings
apply to all types of companies?
The parts of this booklet covering
compulsory winding-up and receivers
(including administrative receivers) apply to registered and
unregistered companies (including
oversea companies).
The parts of this booklet covering
voluntary winding-up and
administration orders do not apply to unregistered companies,
which cannot be wound up by these methods.
If the liquidation or receivership began before 29 December
1986, then the law in force at that time will continue to apply.
Remember: Not all companies in liquidation are insolvent.
3. Do all companies have to go through insolvency proceedings
before being dissolved?
No. If the Registrar has reason to believe that a company is
not carrying on business or is not in operation, its name may
be struck off the register and dissolved without going through
liquidation. A private company that is not trading may apply
to the Registrar to be
struck off the register. This procedure is not an
alternative to formal insolvency proceedings.
More information about striking off and dissolution of a company
is available in our booklet,
'Strike-off, Dissolution and Restoration (Scotland)'.
4. Can anyone supervise insolvency procedures?
All liquidators, administrative receivers, administrators and
supervisors taking office on or after 29 December 1986 must
be authorised insolvency practitioners.
Insolvency practitioners may be authorised by:
- the Chartered Association of Certified
Accountants;
- the Insolvency Practitioners' Association;
- the Institute of Chartered Accountants
in England and Wales;
- the Institute of Chartered Accountants
in Ireland;
- the Institute of Chartered Accountants
of Scotland;
- the Law Society;
- the Law Society of Scotland; or
- the Secretary of State for Trade and
Industry.
5. What happens to the directors
of an insolvent company?
The liquidator, administrative receiver or administrator has
a duty to send the Secretary of State a report on the conduct
of all directors who were in office in the last 3 years of the
company's trading. The Secretary of State has to decide whether
it is in the public interest to seek a disqualification order
against a director.
Examples of the most commonly reported conduct are:
- continuing the company's trading when
the company was insolvent;
- failing to keep proper accounting records;
- failing to prepare and file accounts
or make returns to Companies House; and
- failing to send in returns or pay to
the Crown any tax that is due.
Back
to top
CHAPTER
2
Corporate voluntary arrangements (CVA) including CVA moritoria
1. What is a corporate voluntary arrangement?
A corporate voluntary arrangement is when a company makes
an agreement with its creditors by proposing a 'composition
in satisfaction of its debt' or a 'scheme of arrangement of
its affairs'. This means an arrangement, approved by the court,
in which the company has formally agreed terms with its creditors
for the settlement of its debts.
2. Who may propose a corporate voluntary arrangement?
A corporate voluntary arrangement may be proposed by:
- the administrator, if there is an administration
order;
- the liquidator, if the company is being
wound up; or
- the directors, in other circumstances.
3. Who considers the proposal?
When the directors have proposed the arrangement, the nominee
appointed to supervise its implementation reports to the court
within 28 days on whether, in his or her opinion, meetings of
the company and of its creditors should be called.
4. How is a proposed corporate voluntary arrangement
approved?
The meetings summoned by the nominee decide whether to approve
the arrangement which, subject to certain restrictions, may
be approved with or without modifications. It is then binding
on all creditors who had notice of the meeting and were entitled
to vote. All creditors who had notice of the meeting are bound
by the terms of the arrangement.
5. What happens when the corporate voluntary arrangement
is approved?
If the meetings of members and creditors approve the arrangement,
then the nominee or his replacement becomes the supervisor of
the arrangement.
6. What needs to be sent to Companies House?
The supervisor must send a copy of the chairman's report of
the meeting.
At least once every 12 months, the supervisor must send an account
of receipts and payments, together with a progress report, to
all interested parties including the Registrar.
When the arrangement is completed, the supervisor must notify
the Registrar, within 28 days after final completion. If the
arrangement is suspended or revoked, the Registrar must be notified.
The appropriate forms are:
| Form title |
Number |
| Notice to Registrar of Companies
of voluntary arrangement taking effect |
1.1 (Scot) |
| Notice to Registrar of Companies
of order of revocation or suspension of voluntary arrangement
|
1.2 (Scot) |
| Notice to Registrar of Companies
of supervisor's abstract of receipts and payments |
1.3 (Scot) |
| Notice to Registrar of Companies
of completion or termination of voluntary arrangement
|
1.4 (Scot) |
Please note: These forms are not available
from Companies House. They can be obtained from legal stationers.
7. Corporate voluntary
arrangement moratorium
The Insolvency Act 2000 introduced the
option of a moratorium into the existing corporate voluntary
arrangement procedures.
The courts decide whether a company
is eligible for a moratorium. The moratorium will normally
last for a period of 28 days and will be managed by a nominee,
who may or may not be a registered insolvency practitioner.
The Insolvency (Scotland) Amendment Rules
2002 came into force on 1 January 2003 and introduced the
following statutory forms that are required to be filed with
the Registrar of Companies:
| Form title |
Number |
| Notice to Registrar of Companies
of commencement of moratorium |
1.11 (Scot) |
| Notice to registrar of Companies
of extension or further extension or renewal or continuation
of moratorium |
1.12 (Scot) |
| Notice to Registrar of Companies
of ending of moratorium |
1.14 (Scot) |
| Notice to Registrar of Companies
of withdrawal of nominee’s consent to act |
1.16 (Scot) |
| Notice to registrar of Companies
of appointment of a replacement nominee |
1.18 (Scot) |
Please note: These forms are not available
from Companies House. They can be obtained from legal stationers.
At the end of a moratorium a company
may (or may not) proceed to a corporate voluntary arrangement.
Back
to top
CHAPTER 3
‘In Administration’ and ‘administration orders’
The current law concerning administration was introduced with
effect from 15 September 2003. For details of the previous
law, see Part 2 of this chapter. Under the new regime, a company
will usually be described as being ‘in administration’ – under
the old regime a company would be described as subject to
an ‘administration order’. We have used these two terms to
describe the different regimes.
What follows is a brief outline of the
process of administration: it is not a complete statement
of the law.
Part 1: Cases beginning on or
after 15 September 2003: ‘In administration’
1. What is 'in administration'?
Administration is when a person, ‘the administrator’, is appointed
to manage a company’s affairs, business and property for the
benefit of the creditors. The person appointed must be an
insolvency practitioner and has the status of an officer of
the court (whether or not he or she is appointed by the court).
The objective of administration is to:
- rescue a company as a going concern;
- achieve a better price for the company’s
assets or otherwise realise their value more favourably
for the creditors as a whole than would be likely if the
company were wound up (without first being in administration);
or
- in certain circumstances, realise the
value of property in order to make a distribution to one
or more preferential creditors.
2. How does a company enter administration?
A company enters administration when the appointment of an
administrator takes effect. An administrator may be appointed
by:
- an administration order made by the
court;
- the holder of a floating charge; or
- the company or its directors.
3. What are the effects on
a company of being in administration?
When a company enters administration:
- any pending winding-up petitions will
be dismissed or suspended;
- there will be moratorium on insolvency
and on other legal proceedings;
- if an administrative receiver has been
appointed, he or she must vacate office;
- if a receiver of part of the company’s
property has been appointed, he or she must vacate office(if
the administrator requires this).
4. Who must be told that a
company is in administration?
As soon as reasonably practicable,
an administrator must send a notice of his or her appointment
to the company and each of its creditors and publish notice
of his or her appointment in the Gazette and in a newspaper
in the area where the company has its principal place of business.
What is the Gazette?
The Gazette is the official newspaper of record which contains
various statutory notices and advertisements. References to
the Gazette are to the Edinburgh Gazette in respect of companies
registered in Scotland. It is published twice weekly and can
be obtained from The Stationery Office, 73 Lothian Road, Edinburgh
EH3 9AW. Visit
www.gazettes-online.co.uk for more information.
The administrator must send a notice of
his or her appointment to the Registrar on Form 2.11B (Scot).
While a company is in administration,
every business document issued by or on behalf of the company
or the administrator must state the name of the administrator
and that he or she is managing the affairs, business and property
of the company.
5. What does the process of administration
involve?
The administrator will request a statement of the company’s
affairs from relevant people (e.g. an officer or employee
of the company).
No later than 8 weeks after the company
enters administration, the administrator must make a statement
setting out proposals for achieving the purpose of the administration
or explaining why they cannot be achieved. The proposals may
include a voluntary arrangement or a compromise or arrangement
with creditors or members.
The statement setting out the proposals
must be sent to:
- The Registrar of Companies.
- Every creditor of the company with
an invitation to an initial creditors’ meeting, if one is
to be held. The business of the initial creditors meeting
will be to approve (with or without modifications) the statement
of proposals. Following the initial meeting, the administrator
may hold further creditors’ meetings, form a creditors committee,
or deal with matters in correspondence between the administrator
and creditors.
- Every member of the company unless
the administrator undertakes to provide a copy free of charge
to any member of the company who applies in writing for
a copy. Any revisions to the proposals following a creditors’
meeting must, likewise, be notified to members.
Decisions taken at creditors’ meetings
must be reported to the Register of Companies on Form 2.33B(scot)
is End of Administration form.
6.When does administration end?
There are several ways in which administration
can come to an end.
Administration can end automatically when
the administrator’s term of office expires and must be notified
to the Registrar on Form 2.21B (Scot). The appointment of
an administrator expires after 1 year. However, this may be
extended with the consent of creditors or the court. Any extension
must be notified to the Registrar on Form 2.22B(Scot).
An administrator appointed under a court
order may apply to the court to end administration if he or
she thinks that the purpose of the administration cannot be
achieved or the company should not have entered administration,
or a creditors’ meeting requires the application. The court
will discharge the administration order and the administrator
must notify the Registrar on Form 2.24B(Scot).
An administrator appointed by the holders
of a floating charge or by the company or its directors may
end administration when the purpose of administration has
been sufficiently achieved. The administrator must file notice
with the court and with the Registrar on Form 2.23B (Scot).
Administration may end on the application
of a creditor to the court alleging an improper motive on
the part of the person who appointed the administrator or
applied to the court for an administration order. The administrator
must send a copy of the order with Form 2.33B to the Registrar
within 14 days of the order being made.
Administration may end when the company
moves into creditors’ voluntary winding up. This can happen
where the administrator thinks that each secured creditor
is likely to be paid and a distribution will be made to unsecured
creditors, if there are any. The administrator must notify
the Registrar on Form 2.25B(Scot) and send copies to the court
and each creditor. The company will then be wound up as if
a resolution for voluntary winding up had been passed on the
day on which notice is registered with the Registrar.
Administration may end when the company
moves into dissolution. This can happen if the administrator
thinks that a company has no property with which to make a
distribution to its creditors. The administrator must send
notice to the Registrar on Form 2.26B(Scot) and send copies
to the court and each creditor. 3 months after the date the
form is registered with the Registrar, the company will be
dissolved unless, on application to the court, an order is
made to extend or suspend the period or stop the dissolution.
Notice of the order must be notified to the Registrar on Form
2.27B(Scot).
7. Which forms should be used?
The Insolvency Scotland (Amendment) Rules 2003 came into force
on 15 th September 2003, and introduced new statutory forms
for filing with the Registrar, some of which are listed below:
| Form title |
Number |
| Notice of administrator’s appointment
|
2.11B (Scot) |
| Notice of statement of affairs |
2.15B (Scot) |
| Statement of administrator’s proposals
|
2.16B (Scot) |
| Statement of administrators revised
proposals |
2.17B (Scot) |
| Notice of result of meeting of creditors |
2.18B (Scot) |
| Notice of order to deal with secured
property |
2.19B (Scot) |
| Administrators progress report |
2.20B (Scot) |
| Notice of automatic end of administration
|
2.21B (Scot) |
| Notice of extension of period of
administration |
2.22B (Scot) |
| Notice of end of administration |
2.23B (Scot) |
| Notice of court order ending administration
|
2.24B (Scot) |
| Notice of move from administration
to creditors’ voluntary liquidation |
2.25B (Scot) |
| Notice of move from administration
to dissolution |
2.26B (Scot) |
| Notice to registrar of companies
in respect of date of dissolution |
2.27B (Scot) |
| Notice of resignation by administrator
|
2.29B (Scot) |
| Notice of Vacation of office by administrator
|
2.30B (Scot) |
| Notice of appointment of replacement/additional
administrator |
2.31B (Scot) |
| Notice of insufficient property for
distribution to unsecured creditors other than by virtue
of s.176A(2)(a) |
2.32B (Scot) |
Please note: These forms are not available
from Companies House. They can be obtained from legal stationers.
‘In administration’ does not apply
to Limited Liability Partnerships (LLP’s). LLP’s will enter
Administration under the old style Administration Order (see
part 2)
Part 2: Cases that began before
15 th September 2003: Administration orders
Before 15 September 2003, the only
way into administration was by court order to appoint an administrator.
Where a petition for an administration order had been presented
before 15 September 2003 the old law continues to apply.
1. What was the purpose of the
administration order?
Its purpose may have been to:
- save the whole or any part of the company
as a going concern; or
- approve a corporate voluntary arrangement;
or
- sanction (agree to) a compromise or
arrangement; or
- get a better price for the company's
assets or otherwise realise their value more favourably
than in a winding up.
2. What are the administrator's
duties?
As with the current law, the administrator
would take control of all the property to which the company
was, or appeared to be entitled. He or she would have prepared
proposals for achieving the purpose for which the administration
order was made and called a meeting of creditors to consider
those proposals. If the majority of creditors approved the
proposals, the administrator would then manage the affairs,
business and property of the company in accordance with the
proposals.
3. Would the administrator send
anything else to Companies House?
Yes, as now, the administrator would have
sent details of the proposals to the Registrar. This would
have been done within 3 months after the administration order
was made. Then, every 6 months, the administrator must send
an account of receipts and payments.
4. When does administration end?
It continues until the court discharges
the administration order - in other words, decides that the
order is no longer needed. If there is a court order to discharge
the order, or to vary its terms, the administrator must send
a copy to the Registrar within 14 days after the order was
made.
5 Which forms would be used?
The appropriate forms are:
| Form title |
Number |
| Notice of petition for administration
order |
2.1 (Scot) |
| Notice of administration order |
2.2 (Scot) |
| Notice of Dimissal of Petition for
Administration Order |
2.3 (Scot) |
| Notice of discharge of administration
order |
2.4 (Scot) |
| Notice of statement of administrator's
proposals |
2.7 (Scot) |
| Notice of result of meeting of creditors
|
2.8 (Scot) |
| Administrator's abstract of receipts
and payments |
2.9 (Scot) |
| Notice of Order to deal with Secured
Property |
2.11 (Scot) |
| Notice of variation of administration
order |
2.12 (Scot) |
Please note: These forms are not available
from Companies House. They can be obtained from legal stationers.
Back
to top
CHAPTER
4
Receivers
1. What is a receiver?
Appointed by or on behalf of the holder of a floating charge,
a receiver has the power to sell or otherwise realise the
charged assets of the company in an attempt to repay the debt
owed to the charge-holder.
2. Who tells the Registrar and Accountant in Bankruptcy
(AIB) that a receiver has been appointed?
Within 7 days of the appointment, the person who appoints
the receiver must deliver notice to the Registrar and AIB.
When the receiver ceases to act, the holder of the floating
charge must deliver notice to the Registrar and AIB within
14 days.
3. What document must the receiver send?
Within 3 months of his appointment, the receiver must deliver
a report to AIB with copies to:
- the company's creditors;
- the holders of a floating charge; and
- any trustees for secured creditors
of the company.
The report must:
- explain the circumstances leading to
the appointment of the receiver;
- give information about any action being
taken by the receiver;
- include a summary of the statement
of affairs prepared for the receiver by the officers or
employees of the company.
Statement of affairs Form
3.2 (Scot)
This is a summary of the company's assets, liabilities
and creditors. The administrative receiver decides whether
it is required and who should prepare it.
Within 2 months of the anniversary of appointment, the
receiver must send AIB an account of receipts and payments
covering the first 12 months of receivership and for every
12 months thereafter. |
4. Which forms should be used?
The appropriate forms are:
| Form title |
Number |
| Notice of the appointment of a receiver
by a holder of a floating charge |
1 (Scot) |
| Notice of the appointment of a receiver
by a court |
2 (Scot) |
| Notice of the receiver ceasing to
act or of his removal |
3 (Scot) |
| Receiver's abstract of receipts and
payments |
3.2
(Scot) |
| Notice of Authorisation to Dispose
of Secured Property |
3.4
(Scot) |
| Notice of receiver's report |
3.5
(Scot) |
Please note: Form3.2(Scot) is not available
from Companies House. It can be obtained from legal stationers.
Back
to top
CHAPTER
5
Voluntary liquidation
There are two kinds of voluntary liquidation:
- members' voluntary liquidation (MVL)
- which means the directors have made a statutory declaration
of solvency;
- creditors' voluntary liquidation (CVL)
- which means that the directors have not made such a declaration.
1. When can a company go into
MVL?
This can take place when the directors of a company believe
that the company is solvent.
| A majority of the company's directors
must make a statutory declaration of solvency in the 5
weeks before a resolution to wind up the company is passed
- see question 3. |
2. What is in the declaration?
The statutory declaration will state that the directors have
made a full inquiry into the company's affairs and that, having
done so, they believe that the company will be able to pay its
debts in full within 12 months from the start of the winding-up.
The declaration will include a statement of the company's assets
and liabilities as at the latest practicable date before making
the declaration.
3. When does liquidation actually start?
The liquidation starts when the members, in general meeting,
pass a resolution
(usually a special
resolution) to wind up the company voluntarily.
4. Must notice of voluntary liquidation be given to
anyone?
Yes. Notice of the special resolution for voluntary winding-up
of the company must be published in the Edinburgh Gazette within
14 days of the general meeting. The company must also send a
copy of the special resolution to the Registrar and AIB within
15 days of the general meeting.
5. When may a CVL be appropriate?
A company may go into CVL when it cannot pay its debts.
6. What must the company do?
The company passes an
extraordinary resolution to say that it cannot continue
in business because of its liabilities and that it is advisable
to wind up.
The resolution must be:
- advertised in the Edinburgh Gazette
within 14 days; and
- sent to the Registrar and AIB within
15 days.
A meeting of creditors must be held
in the next 14 days after passing the resolution. Notice of
the meeting must be sent to the creditors at least 7 days before
the meeting. Also, the directors must prepare a statement of
affairs for consideration at the meeting, and appoint one of
themselves to attend and preside over the meeting.
When the liquidator is appointed, the directors must provide
him or her with a statement of affairs and otherwise co-operate
with the liquidator.
7. Does the company have to advertise notice of the
meeting?
Yes. The meeting must be advertised in the Edinburgh Gazette
and in two newspapers in the area where the company has its
principal place of business.
8. What are the main duties of a liquidator?
The liquidator is appointed to wind up the company's affairs.
The liquidator does this by calling in all the company's assets
and distributing them to its creditors. If anything is left
over, the liquidator distributes it among the members of the
company.
9. Does a liquidator need to notify anyone of his or
her appointment?
Yes. Within 14 days of being appointed, a liquidator must publish
a notice of appointment in the Edinburgh Gazette and notify
the AIB. If the liquidation is voluntary, the liquidator must
also give notice in a newspaper in the area where the company
has its principal place of business.
10. What does the liquidator have to send to AIB?
The liquidator must send a statement of affairs and a statement
of receipts and payments for the first 12 months of liquidation.
After that, statements must be sent every 6 months until the
winding-up is complete.
11. Can an MVL be converted into a CVL?
Yes. If the liquidator decides that the company will not be
able to pay its debts in full in the period stated in the directors'
statutory declaration of solvency, he or she must call a meeting
of the creditors which must be held within 28 days. The liquidation
becomes a CVL from the date of the meeting.
12. What are the requirements for giving notice in such
a case?
The liquidator must:
- post a notice of the meeting to each
creditor at least 7 days before the date of the meeting;
- advertise the date of the meeting in
the Edinburgh Gazette and in 2 newspapers in the area where
the company has its principal place of business; and
- prepare a statement of affairs for
consideration at the meeting. A copy of the statement must
be sent to the AIB within 7 days of the meeting.
13. What happens when the company's
affairs are fully wound up?
The liquidator presents an account to final meetings of creditors
and members of the company. He or she must advertise the meetings
in the Edinburgh Gazette at least one month before.
Within one week of the meeting having taken place, the liquidator
must send the account to the Registrar and AIB together with
a return of the final meeting.
Unless the court makes an order deferring the dissolution of
the company, it is dissolved 3 months after the return and account
are registered at Companies House.
14. Which forms should be used?
The appropriate forms are:
| Form title |
Number |
| Notice of appointment of liquidator
voluntary winding-up (members or creditors)* |
600 |
| Statement of affairs* |
4.4
(Scot) |
| Liquidator's statement of receipts
and payments* |
4.5
(Scot) |
| Notice of liquidator's statement
of receipts and payments* |
4.6 (Scot) |
| Notice of final meeting of creditors** |
4.17 (Scot) |
| Return of final meeting of voluntary
winding-up** |
4.26 (Scot) |
| Notice of Court’s Order Sisting Proceedings
in Winding Up by the Court ** |
4.27 (Scot) |
| Liquidator's statement of account** |
92 (Scot) |
| Return of Final Winding Up meeting
|
111/110 MVL |
| Return of Final Winding Up meeting
|
112/110 CVL |
Please note: With the exception of forms
600, 4.17 and 4.26, these forms are not available from Companies
House. They can be obtained from legal stationers. * Forms
600, 4.4, 4.5 and 4.6 to be sent to AIB. ** Forms 4.17, 4.26,
4.27 and 92 to be sent to Companies House Edinburgh and AIB.
Back
to top
CHAPTER
6
Compulsory liquidation
1. What is 'compulsory liquidation'?
Compulsory liquidation of a company is when the company is
ordered by a court to be wound up.
2. Which courts can order a compulsory liquidation?
The Court of Session, or Sheriff Court with the appropriate
jurisdiction, may order the winding-up of a company. This
may be, for example, on the petition of a creditor or creditors
on the grounds that the company cannot pay its debts.
A company is regarded as unable
to pay its debts if, for example, a creditor:
- is owed more than £750;
- presents a written demand in
the prescribed form (known as a statutory demand (Form
4.1 (Scot)) to the company; and
- the company fails to pay, secure
or agree a settlement of the debt to the creditor's
reasonable satisfaction.
There are other situations where
a company is deemed unable to pay its debts. Please read
the relevant legislation. |
The court may also order the company to be wound up on the petition
of:
- the company itself;
- the company's directors or one or more
members;
- the Secretary of State for Trade and
Industry; or
- the Financial Services Authority (formerly
the Securities and Investment Board).
In the case of a European company (SE)
registered in GB, the Secretary of State may petition the
Court for a winding up order on the grounds that it appears
that the SE does not have both its head office and registered
office in GB. For more information on SEs, please see our
booklet, ‘The European Company: Societas Europaea (SE)’.
3. Must the petition be advertised?
Unless the court directs other arrangements, the petition
must be advertised in the Edinburgh
Gazette.
4. What appears on the company record held by Companies
House?
If the petition is successful, the company must send
Form 4.2 (Scot) and a copy of the winding-up order to
the Registrar and AIB straightaway and it will be placed on
the company's public record.
The petition itself is not presented to the Registrar so it
will not appear on the public records.
5. Who acts as the liquidator when an order is made
to wind up the company?
A provisional liquidator may be appointed after the petition
is presented. If a winding up order is made, an interim liquidator
is appointed. Both the provisional and interim liquidator
must notify AIB of their appointments.
6. What are the duties of the interim liquidator?
Within 28 days of the appointment, the interim liquidator
investigates the company's affairs and will call meetings
of creditors and contributories (that is, those people liable
to contribute to the assets of a company in the event of it
being wound up). The meetings appoint the official liquidator
who must notify AIB within 7 days. If no liquidator is appointed
at the meetings, the court appoints a liquidator.
The liquidator must send to AIB a statement of receipts and
payments for the first 12 months of liquidation and thereafter
every 6 months until the winding up is complete.
7. What happens when the winding-up is complete?
When the Registrar and AIB receive notice from the liquidator
of the final meeting that winding-up is complete, the Registrar
will register it and publish its receipt in the Edinburgh
Gazette.
Unless the Court directs otherwise, the company will be dissolved
three months after the notice was registered at Companies
House.
| If the liquidator, is satisfied that
the company's realisable assets (that is, assets which
could be sold or disposed of to raise money) will not
cover the expenses of winding-up and that no further investigation
of the company's affairs is necessary, he or she may apply
to the Registrar for early dissolution of the company.
The company will be dissolved 3 months after the application
is registered at Companies House |
8. Which forms should be used?
The appropriate forms are:
| Form title |
Number |
| Statutory demand for payment of debt |
4.1
(Scot) |
| Notice of winding-up order |
4.2 (Scot) |
| Liquidator's statement of receipt
and payments* |
4.5(Scot) |
| Notice of liquidator's statement
of receipts and payments* |
4.6(Scot) |
| Notice of appointment of liquidator |
4.9(Scot) |
| Notice of final meeting of creditors |
4.17 (Scot) |
| Return of Final Meeting in a Voluntary
Winding up |
4.26 (Scot) |
Please note: These forms are not available
from Companies House. They can be obtained from legal stationers
* Forms 4.5 (Scot) and 4.6 (Scot) should be sent to AIB only.
Back
to top
CHAPTER
7
European cross-border insolvency proceedings
Council Regulation (EC) No.1346/2000 became
effective on 31 May 2002. The Regulation is directly applicable
and an integral part of each member state’s law (except Denmark
where parallel legislation will apply). To implement the Regulation
in the UK, it was necessary to make some limited changes to
the Insolvency Act 1986 and the Insolvency Rules.
1. What is the effect of the Regulation?
The Regulation restricts where insolvency proceedings can
be opened to the country where the debtor has his “centre
of main interests”. It requires insolvency proceedings opened
under the Regulation to be recognised, and liquidators to
be able to exercise their powers, in all member states.
The relevant company insolvency proceedings
covered by the Regulation in the UK are –
- Winding up by or subject to the supervision
of the court
- Creditors’ voluntary winding up (with
confirmation by the court)
- Administration
- Corporate voluntary arrangements under
insolvency legislation
The Regulation does not apply to receiverships
– administrative or otherwise – nor to members’ voluntary
winding up or to winding-up orders.
As a result of the regulations a number
of statutory forms (relating primarily to the opening of insolvency
proceedings) have been amended and one new form has been introduced.
2. Companies incorporated in Great Britain
Insolvency proceedings opened in this
country will continue as normal. However, insolvency proceedings
may be opened in another EU Member State if the company has
its centre of main interests there. The public records of
companies registered in England and Wales will show insolvency
proceedings opened in another Member State of the EU. This
will be the only indication that there are insolvency proceedings
taking place abroad – the ‘L’ (for liquidation) marker will
not appear against the company name on the Registrar’s index
of company names.
3. Companies incorporated in other
EU member states
Insolvency proceedings may be opened in
the UK and be governed by UK law if the company has its centre
of main interests here. Alternatively, insolvency proceedings
may be opened in another Member State.
The public records of EU companies that
have registered a place of business or branch within England
and Wales will show insolvency proceedings opened in another
Member State of the EU. This will be the only indication that
there are insolvency proceedings taking place abroad - the
'L' (for Liquidation) marker will not appear against the company
name on the Registrar's index of company names.
EU companies that have not registered
a place of business or branch within England and Wales can
submit details of insolvency proceedings opened in another
Member State of the EU. These documents may be searched on
the Register of EC Insolvency Orders by contacting Companies
House on 0870 33 33 636.
4. Where can I obtain copies of the relevant legislation
and get further information?
Copies of the Council Regulation and relevant
UK Statutory Instruments are available on the Insolvency Service
web-site (www.insolvency.gov.uk)
Enquiries about the Regulation should
be forwarded to the Insolvency Service Policy Unit at
Policy.Unit@insolvency.gsi.gov.uk or telephone 020 7291
6740
Back
to top
CHAPTER
8
Frequently Asked Questions
Liquidation and other insolvency procedures
can be lengthy and complex. This booklet cannot answer every
query but these are some of the most frequently asked questions.
1. Do I need to send the Court
Order appointing a provisional liquidator to Companies House?
A Form 4.9 (Scot) is completed on the
appointment of a Provisional Liquidator and delivered to Companies
House Edinburgh. This is required by Rule 4.2 of the Insolvency
(Scotland) Rules 1986.
2.How do I defer the date of
dissolution of a company that was subject to liquidation proceedings?
When the Registrar receives
a liquidator’s final documentation under sections 201 and
205 of the Insolvency Act 1986, it must be registered straightaway.
After a period of approximately three months, the company
is dissolved. However, it may be possible to defer the date
at which the dissolution is to take effect.
In order to do so, the Registrar must
receive either a direction to defer from the Secretary of
State (in compulsory liquidation cases – s.205) or an order
of court to defer (in voluntary cases – s.201). You should
immediately apply for whichever is appropriate. Please note
that whilst it may be possible to extend the deferment period
by making a further application, it is not possible to shorten
it. You should, therefore, select the period of the deferment
with care.
We must receive the document in time to
allow us to examine and register it before the company is
dissolved.
3. Do the directors of a company
subject to a liquidation need to file annual accounts and annual
returns (Forms 363)? Once
a company goes into liquidation and the statutory liquidation
documents are registered at Companies House, there is no need
to file annual accounts and annual returns. However, until
Companies House receives notification that the liquidation
has commenced the annual accounts and annual returns will
still be deemed to be due.
If the company comes out of Liquidation,
via a court order to sist (see below) and is returned to the
live companies register then annual accounts and annual returns
should then be filed up to date. Failure to comply could result
in the company being struck off the register.
Any other queries relating to filing annual
accounts and annual returns should be referred to Compliance
Section at Companies House by contacting Companies House on
0870 33 33 636.
4. Will Companies House accept
notification of the resignation of a director (Form 288b) once
a company has gone into liquidation? Companies
House will accept correctly completed forms 288b relating
to the resignation of directors even if the company has gone
into liquidation.
Any other queries relating to filing Forms
288b should be referred to Document Examination Support Section
at Companies House by contacting Companies House on 0870 33
33 636.
5. What happens when I file
an Order to stay a liquidation? The
Court may make an Order staying, or sisting (meaning, stopping)
winding up proceedings, either altogether or for a limited
period of time, pursuant to Section 112 and Section 147 of
the Insolvency Act 1986.
The Order is to be sent to the Registrar
forthwith for entry onto the records relating to the company.
The Registrar records the Order onto the public records in
the following ways:
- The Order itself is placed on the public
record for the company. It is listed as a ‘miscellaneous’
document on the list of documents received by the Registrar.
- The Liquidation status flag is removed
from the company’s public record. A searcher will still
be able to obtain a copy of the winding up order. In addition,
the insolvency details can still be obtained from the insolvency
section of the electronic search products.
- Once the stay Order has been recorded,
any outstanding accounts and annual returns must be filed,
as for any other live and active company. Failure to comply
may result in the company being struck off the register.
6. My central heating has sprung
a leak. The company is now in liquidation. Is my guarantee still
valid? Companies House
is unable to answer this query. Please contact the liquidator.
7. How can I find out the name
of the liquidator of a certain company? This
information is provided free on the Companies House web-site
(www.companieshouse.gov.uk)
or by calling 0870 333 3636.
Back
to top
CHAPTER
9
Quality of documents
1. What happens to documents sent
to Companies House?
The documents and forms you deliver to
Companies House are scanned to produce an electronic image.
The original documents are then stored, and the electronic
image is used as the working document.
When your business contacts view the company
record, they see the electronic image reproduced on-line.
So it is important not only that the original is legible,
but that it can also produce a clear copy.
This chapter lays down a few quality guidelines
to follow when preparing a document for filing at Companies
House.
2. What happens if my documents
do not meet the guidelines?
Section 706 of the Act allows Companies
House to reject documents that cannot be captured electronically,
giving a notice saying why they are unacceptable. An acceptable
copy must be delivered within 14 days of the notice (otherwise
we treat the original as not having been delivered).
3. How should documents be set
out?
Every document delivered to the Registrar
must state in a prominent position the registered number of
the company, and must comply with any requirements specified
by the Registrar relating to the legibility of that document.
Briefly, documents should be on A4 size,
plain white paper between 80gsm and 100gsm in weight with
a matt finish. Text should be black, clear, legible, and of
uniform density. Letters and numbers must not be less that
1.8mm high, with a line width of not less than 0.25mm.
When you fill in a
form:
- use black ink or black type;
- use bold lettering (some elegant
thin typefaces and pens give poor quality copies);
- don't send a carbon copy;
- don't use a dot matrix printer;
and
- remember - photocopies can result
in a grey shade that will not scan well.
When you complete other
documents, please remember:
- the points already made relating
to completing forms;
- to use A4 size paper with a good
margin;
- to supply them in portrait format
(that is with the shorter edge across the top);
- to include the company number
in the top right-hand corner of the first page.
|
Important: coloured ink
can drop out (disappear) when a document is scanned to produce
an image. To prevent this - always use black ink to
complete and sign all documents.
Back
to top
CHAPTER
10
Further information
1. Where can I go for help?
Staff at Companies House in Edinburgh
and AIB will be able to advise you on general matters, but
if you are considering liquidation or insolvency proceedings
you should seek the advice of an insolvency practitioner or
the Insolvency Service.
Complaints about the conduct of a licensed
insolvency practitioner should be sent, in writing, to:
The Insolvency Practitioners' Section
The Insolvency Service
Area 1.10
PO Box 203
21 Bloomsbury Street
London
WC1B 3QW
They will then forward the complaint to
the practitioner's authorising body.
2. Where do I get forms and guidance
booklets?
This is one of a series of Companies House
booklets, which provide a simple guide to the Companies Act
- see the inside front cover for a full list.
Guidance booklets are available free of
charge from Companies House. The quickest way to get them
is through our website or by telephoning 0870 333 3636. If
you prefer you can write to our Stationery Teams in Cardiff
or Edinburgh - addresses on the inside back
cover.
Certain forms as mentioned previously
in the text can be obtained from Companies House. Forms can
also be obtained from the Accountant in Bankruptcy or from
legal stationers. A list of legal stationers can usually be
found in Yellow Pages.
3. How do I send information to
the Registrar?
- Documents, including court orders,
should display the correct company name and registration
number, where appropriate.
- Companies House will only acknowledge
receipt if you provide a stamped addressed envelope.
- You should supply documents in portrait
format (that is, with the shorter edge across the top).
Documents may be delivered by post, by
hand (personally or by courier) or by the Hays Document Exchange
service.
The relevant addresses are:
The Registrar of
Companies
Companies House
37 Castle Terrace
Edinburgh EH1 2EB
DX ED235 Edinburgh 1 LP
4 Edinburgh -2 |
The Accountant
in Bankruptcy
George House
126 George Street
Edinburgh EH2 4HH
DX ED311
www.aib.gov.uk |
| Please note: Companies House
does not accept accounts or any other statutory documents
by fax. |
Back
to top
Home
| Why
Us
| Registered
Companies | Name
Availability | Order
Online
Guiding
Tips | Resources
| Formation
Cost | Virtual
Service Office
My Account | Contact
Us |
