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June 25, 2020 at 3:44 am
Two questions: 1) Creditor’s Voluntary winding up…->Is the resolution not passed by the directors? 2) In case of liquidation, holder of partly paid shares will pay to “The company…. shall he not pay to the Liquidator?
June 25, 2020 at 7:34 am
Any resolution to place the company into liquidation is passed by ‘the company’ – only the company itself can make that decision
‘The company’, of course, not having a brain of its own, is managed by the directors representing the shareholders.
The financial difficulties that face the company are know to the directors and not necessarily to the shareholders. Thus, the directors pass a resolution to call a meeting of members at which the directors will propose the resolution that ‘by reason of its debts, the company can no longer continue’ and the members will be recommended to pass that resolution and, at the same time nominate (not appoint) a liquidator
By the next following business day, typically scheduled for a time less than 1 hour after the members’ meeting, the directors will have called a creditors meeting to inform the creditors that the members have placed the company into liquidation and have nominated Ms X as a liquidator. The creditors are invited to accept or ignore that nomination and, if they choose to ignore, now have the opportunity to appoint a liquidator of their own choice
Once appointed, the liquidator (whether this be a members’ voluntary liquidation, a creditors’ voluntary liquidation or even a compulsory liquidation following a court order) will require a list of creditors (known and contingent) and a list of assets (book value and estimated realisable value) together with details of the members, their shareholdings and whether their shares are fully or partly paid. At this stage, the directors have lost control of the company and the liquidator has taken full control
Any members that hold partly paid shares will be required to pay up the unpaid amount to the company – payments made to the company’s bank account that is now under the control of the liquidator
Are the members paying the company? Or are they paying the liquidator? If a payment is being made by cheque and is payable to the XYZ PLC, no problem. But I can imagine that some members could make that payment to ‘the liquidator of XYZ PLC. I also imagine that the liquidator will have foreseen this position and opened a dedicated bank account in the liquidator’s name , that count to be held on trust by the liquidator for the benefit of the company
Is that ok?
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