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CS Professional · Insolvency and Bankruptcy - Law and Practice · Voluntary Liquidation of Companies

Bharat Alloys Ltd owes debts to creditors. Its members passed the special resolution for voluntary liquidation on 10 June. Creditors representing two-thirds in value of debt approved it on 15 June. From which date do the voluntary liquidation proceedings commence?

Proceedings are deemed to commence on 10 June, the date the members passed the resolution. Creditor approval on 15 June is a condition that must be satisfied, but it does not shift the commencement date under section 59(5).

  1. A15 June, the date of creditors' approval
  2. B10 June, the date of the members' resolutionCorrect
  3. C22 June, seven days after the creditors' approval
  4. DThe date of the liquidator's public announcement

Explanation

Section 59(5) says that, subject to creditors' approval, proceedings are deemed to commence from the date of passing the members' resolution under section 59(3)(c). So commencement is 10 June. The creditors' approval date is not the commencement date, though it is needed to confirm commencement.

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