Corporate Insolvency brings about a number of legal issues which affect the rights of all stakeholders, the ranking of creditors and compliance with various legal procedures intended to safeguard the interests of all parties involved. Also, companies need to ensure that, where they can, they avail themselves of the best insolvency option for their company/ies.
Insolvency proceedings may start when a company is no longer able to pay its debts and there are three proceedings for insolvency provided by the Companies Act;
- Voluntary Winding Up – which can be further divided into;
- Members Voluntary Winding up; which occurs when the directors of a company or a majority of them have made, within 4 weeks before the winding up resolution is passed, a statutory declaration as to the company’s solvency.
- Creditors’ Winding up; which occurs when no declaration of solvency is made before the winding up resolution is passed.
- Compulsory Winding up by the Court / Court Winding Up
This type of winding up is known as ‘Compulsory’ due to the fact that it is ordered directly by the Court upon application being filed by;
- The Company Itself
- Any company creditor or contributor
- The directors
- The Official Receiver
- Any creditor or creditors
- The Registrar of Companies
- Any Debenture holder
Away from winding up their own companies, clients might also find themselves in need of representation in third party liquidation proceedings. Our team of lawyers are well experienced in insolvency litigation and look to represent clients in the best possible way, keeping their best interest in mind.
At GMX we can also provide guidance and advice to clients in relation to liquidation or bankruptcy proceedings they might be effected with and any legal assistance necessary to liquidators in relation to procedures and formalities involved in the winding up processes, particularly, when cross-border issues are involved.