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

Orchid Pharma Ltd owes debts. Members passed the special resolution on 5 May and creditors holding two-thirds in value approved it on 9 May. The company must notify the ROC and the Board. From which date is the voluntary liquidation deemed to have commenced, and by when must notice be given?

Commencement is deemed from 5 May, the date of the members' resolution, once creditors approve. Because creditor approval was required, notice to the ROC and the Board is due within seven days of that approval, by 16 May.

  1. ACommenced on 5 May; notice within seven days of the creditors' approval, i.e. by 16 MayCorrect
  2. BCommenced on 9 May; notice within seven days of the creditors' approval, i.e. by 16 May
  3. CCommenced on 5 May; notice within seven days of the members' resolution, i.e. by 12 May
  4. DCommenced on 9 May; notice within fourteen days of the creditors' approval, i.e. by 23 May

Explanation

Under Section 59(5), subject to creditor approval, the proceedings are deemed to commence from the date of passing of the members' resolution, 5 May. Under Section 59(4), the company notifies the ROC and the Board within seven days of the resolution or the subsequent creditor approval, as the case may be. Here creditor approval was needed, so the period runs from 9 May, giving 16 May.

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