|If a Company finds itself in a position of being unable to pay its creditors, and neither Administration or a CVA are appropriate alternatives, the directors of a Company can resolve to appoint a licenced insolvency practitioner to assist in placing the Company into insolvent liquidation. In most instances the Company will have reached the end of the road and a rescue of its business is deemed unlikely.
The directors, with the assistance of an insolvency practitioner, are required to complete a statement of affairs of the Company, summarising the Company's assets and liabilities; and a report on the Company to include certain statutory and accounting information, some background on the Company and reasons for its failure and insolvency. The formal resolution to liquidate the Company and appoint a Liquidator is made by the shareholders, creditors of the Company are provided with the statement of affairs and report on the Company and are invited to vote on certain statutory matters, including ratifying the shareholders choice of liquidator.
The winding down of the Company's affairs in Liquidation can only be managed by a liquidator, who must be duly authorised to act as an insolvency practitioner. Creditors can propose an alternative insolvency practitioner. if such a duly authorised person nominates themselves to fulfil the role.