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What is the difference between a members’ voluntary liquidation and a creditors’ voluntary liquidation? Do either relate to Section 122 of the Insolvency Act 1986 or is that legislation all compulsory liquidation?
Which of the following CANNOT petition for the compulsory winding up of a company on the grounds of INSOLVENCY under s.122 Insolvency Act 1986?
A The board of directors
B The members of the company
C The company’s creditors
D The Secretary of StateWhy can’t the shareholders petition for compulsory liquidation on the grounds of insolvency, yet they can on basis of it being just and equitable?
I’m guessing I’m not understanding the difference between voluntary and compulsory liquidation here?
The notes say it all!
Voluntary? Two types, both started by members’ special resolution
Difference? Solvency ( or the risk that the company may possibly not be able to pay all it’s liabilities in full within 12 months of passing the resolution to wind the company up)
Compulsory? The Court, as a result of a petition presented in Court, says to the company “You’re finished” and that’s the start of the process the must finish with the company being struck off the companies register
Why can’t shareholders petition for a Court winding up? Because they have the amity to pass a special resolution within the company to put the company into voluntary liquidation
S122 is ONLY the grounds for the Court to order the liquidation of a company and isn’t applicable for voluntary liquidations
OK?
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