A director can propose a company stops trading and be liquidated (‘wound up’) if:
- the company can’t pay its debts (it’s ‘insolvent’)
- enough shareholders agree
You also have to hold a meeting to discuss the company’s debts with your creditors and the liquidator. This is known as ‘creditors’ voluntary liquidation’.
Get shareholders’ agreement
You must call a meeting of shareholders and ask them to vote.
75% (by value of shares) of shareholders must agree to the winding-up to pass a ‘winding-up resolution’.
Once the resolution is made there are 3 steps you must follow.
Send the resolution to Companies House within 15 days.
Advertise the resolution in The Gazette.
Your responsibilities as a director will change.
Hold a creditors’ meeting
You must have a meeting with all the creditors within 14 days of the winding-up resolution.
At least one of the following must also be there:
- another director
- the company secretary
- the liquidator
You must tell the creditors about the meeting at least 7 days before it happens and advertise it in The Gazette.
At the meeting your company’s creditors can:
- question company directors about the company’s failure
- suggest an alternative liquidator
You must present the statement of affairs at the meeting. This gives details of the company’s situation and assets. Use:
After the meeting, give the statement to the liquidator who will send it to Companies House or to the Accountant in Bankruptcy for companies in Scotland.