Financial Difficulties Winding-up And Striking Off

Financial Difficulties Winding-up And Striking Off
Financial Difficulties Winding-up And Striking Off
FINANCIAL DIFFICULTIES
The position of the directors 243
461 What should the directors do when they believe that their
company may have financial difficulties? 243
462 What should directors not do when they believe that their
company may have financial difficulties? 244
463 What action might directors take after receiving suitable
professional advice? 244
464 What personal risks might directors run when a company
faces financial difficulties? 245
Administration 246
465 Why was the concept of administration introduced in 1986? 246
466 Yes – but just what is administration? 246
467 What is a Licensed Insolvency Practitioner? 247
468 What are the permitted purposes of administration? 247
469 Who can apply to have a company put into administration? 248
470 Is it true that a company can only go into administration if
it is unable to pay its debts? 248
471 What does ‘unable to pay its debts’ mean? 248
472 What powers does an administrator have? 249
473 What are the consequences of a company going
into administration? 249
474 I am a director of a company that is going to go
into administration. What will my powers be? 250
475 I am a director of a company in administration. Can I
be dismissed by the administrator? 250
476 One of our customers is in administration. What powers
do we have? 250
477 Is an administrator personally liable for contracts that
he makes on behalf of the company? 250
xxxiii
CONTENTS
Receivership 251
478 What is receivership? 251
479 Would you please define an administrative receiver? 251
480 What is the essential difference between administration
and receivership? 252
481 I have heard that there are more administrations and
less receiverships. Why is this? 252
482 How can we stop a receiver being appointed? 252
WINDING-UP
General 253
483 What are the three ways in which a company may be wound up? 253
484 What are the stages in a winding-up? 253
485 What is the difference between a members’ voluntary winding-up
and a creditors’ voluntary winding-up? 253
486 What are acceptable reasons for a members’ voluntary
winding-up? 254
487 In what circumstances can a company be wound
up by the court? 254
488 In what circumstances might the court decide that it is
just and equitable for a company to be wound up? 255
Order of priority in the distribution of funds 255
489 My company is insolvent and is being wound up.
Who will get what money there is? 255
490 If a company is insolvent, what part of its money is
ring-fenced for ordinary creditors? 256
491 Which debts rank as preferential? 256
STRIKING-OFF
Following application by the directors 256
492 We want to end the registration of a dormant, private company.
Is there an alternative to a members’ voluntary winding-up? 256
493 What are the steps leading to a voluntary striking-off of a
private company? 257
xxxiv 501 QUESTIONS FOR COMPANY DIRECTORS AND COMPANY SECRETARIES
494 What are the possible pitfalls of a voluntary striking-off? 257
495 My company has been the subject of a voluntary striking-off.
Could it be restored to the register?
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