Insolvency Act 1986

Chapter IVE+W+S Creditors’ Voluntary Winding Up

97 Application of this Chapter.E+W+S

(1)Subject as follows, this Chapter applies in relation to a creditors’ voluntary winding up.

(2)Sections [F199 and 100] do not apply where, under section 96 in Chapter III, a members’ voluntary winding up has become a creditors’ voluntary winding up.

F298 Meeting of creditors.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99 Directors to lay statement of affairs before creditors.E+W+S

[F3(1)The directors of the company must, before the end of the period of 7 days beginning with the day after the day on which the company passes a resolution for voluntary winding up—

(a)make out a statement in the prescribed form as to the affairs of the company, and

(b)send the statement to the company's creditors.]

(2)The statement as to the affairs of the company F4. . . shall show—

(a)particulars of the company’s assets, debts and liabilities;

(b)the names and addresses of the company’s creditors;

(c)the securities held by them respectively;

(d)the dates when the securities were respectively given; and

(e)such further or other information as may be prescribed.

[F5(2A)The statement as to the affairs of the company shall [F6be verified by some or all of the directors]—

(a)in the case of a winding up of a company registered in England and Wales, [F7be verified by some or all of the directors] by a statement of truth; and

(b)in the case of a winding up of a company registered in Scotland, [F8by affidavit] [F8contain a statutory declaration by some or all of the directors].]

[F9(3)If the directors without reasonable excuse fail to comply with subsection (1), (2) or (2A), they are guilty of an offence and liable to a fine.]

100 Appointment of liquidator.E+W+S

[F10(1)The company may nominate a person to be liquidator at the company meeting at which the resolution for voluntary winding up is passed.

(1A)The company's creditors may in accordance with the rules nominate a person to be liquidator.

(1B)The directors of the company must in accordance with the rules seek such a nomination from the company's creditors.]

(2)The liquidator shall be the person nominated by the creditors or, where no person has been so nominated, the person (if any) nominated by the company.

(3)In the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either—

(a)directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or

(b)appointing some other person to be liquidator instead of the person nominated by the creditors.

101 Appointment of liquidation committee.E+W+S

[F11(1)The creditors may in accordance with the rules appoint a committee (“the liquidation committee”) of not more than 5 persons to exercise the functions conferred on it by or under this Act.]

(2)If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee, not exceeding 5.

(3)However, the creditors may, if they think fit, [F12decide] that all or any of the persons so appointed by the company ought not to be members of the liquidation committee; and if the creditors so [F12decide]—

(a)[F13those persons] are not then, unless the court otherwise directs, qualified to act as members of the committee; and

(b)on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of [F13those persons].

(4)[F14In Scotland, the liquidation committee has, in addition to the powers and duties conferred and imposed on it by this Act, such of the powers and duties of commissioners on a bankrupt estate as may be conferred and imposed on liquidation committees by the rules.]

F15102 Creditors’ meeting where winding up converted under s. 96.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103 Cesser of directors’ powers.E+W+S

On the appointment of a liquidator, all the powers of the directors cease, except so far as the liquidation committee (or, if there is no such committee, the creditors) sanction their continuance.

104 Vacancy in office of liquidator.E+W+S

If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by, or by the direction of, the court), the creditors may fill the vacancy.

[F16104AProgress report to company and creditors F17... [F18(England and Wales)]E+W+S

(1)[F19[F20Where the company is registered in England and Wales]] [F19The] the liquidator must—

(a)for each prescribed period produce a progress report relating to the prescribed matters; and

(b)within such period commencing with the end of the period referred to in paragraph (a) as may be prescribed send a copy of the progress report to—

(i)the members and creditors [F21, other than opted-out creditors] of the company; and

(ii)such other persons as may be prescribed.

(2)A liquidator who fails to comply with this section is liable to a fine.]

105 Meetings of company and creditors at each year’s end [F22(Scotland)].E+W+S

[F23(1)If the winding up [F24of a company registered in Scotland] continues for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Secretary of State may allow.

(2)The liquidator shall lay before each of the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year.

(3)If the liquidator fails to comply with this section, he is liable to a fine.

(4)Where under section 96 a members’ voluntary winding up has become a creditors’ voluntary winding up, and the [F25liquidator sends a statement of affairs to the company's creditors under section 95(1A)(b)] 3 months or less before the end of the first year from the commencement of the winding up, the liquidator is not required by this section to summon a meeting of creditors at the end of that year.]

[F26106Final account prior to dissolution.E+W+S

(1)As soon as the company's affairs are fully wound up the liquidator must make up an account of the winding up, showing how it has been conducted and the company's property has been disposed of.

(2)The liquidator must, before the end of the period of 14 days beginning with the day on which the account is made up—

(a)send a copy of the account to the company's members,

(b)send a copy of the account to the company's creditors (other than opted-out creditors), and

(c)give the company's creditors (other than opted-out creditors) a notice explaining the effect of section 173(2)(e) and how they may object to the liquidator's release.

(3)The liquidator must during the relevant period send to the registrar of companies—

(a)a copy of the account, and

(b)a statement of whether any of the company's creditors objected to the liquidator's release.

(4)The relevant period is the period of 7 days beginning with the day after the last day of the period prescribed by the rules as the period within which the creditors may object to the liquidator's release.

[F27(4A)Subsection (4B) applies where, immediately before the liquidator sends a copy of the account of the winding up to the registrar under subsection (3), there are EU insolvency proceedings open in respect of the company in one or more other member States.

(4B)The liquidator must send to the registrar, with the copy of the account, a statement—

(a)identifying those proceedings,

(b) identifying the member State liquidator appointed in each of those proceedings, and

(c)indicating, in relation to each of those member State liquidators, whether that member State liquidator consents to the company being dissolved.]

(5)If the liquidator does not comply with subsection (2) the liquidator is liable to a fine.

(6)If the liquidator does not comply with subsection (3) the liquidator is liable to a fine and, for continued contravention, a daily default fine.]

[F28(7)Subsection (8) applies where, immediately before the liquidator sends a copy of the account of the winding up to the registrar under subsection (3), there are EU insolvency proceedings open in respect of the company in one or more other member States.

(8)The liquidator must send to the registrar, with the copy of the account, a statement—

(a)identifying those proceedings,

(b)identifying the member State liquidator appointed in each of those proceedings, and

(c)indicating, in relation to each of those member State liquidators, whether that member State liquidator consents to the company being dissolved.]