Insolvency proceedings
In this lesson, you'll learn the key insolvency proceedings available to struggling companies and when each applies. We cover voluntary and compulsory liquidation—the formal dissolution of a company—and administration, which aims to rescue a company as a going concern.
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In this lesson
- 0:00 Insolvency and Administration overview
- 0:29 Liquidation as formal company dissolution
- 1:23 Voluntary versus compulsory liquidation
- 1:50 Administration and company rescue options
About this lesson
Understanding these options is essential for the Corporate and Business Law paper, as insolvency law frequently appears in exam questions testing your knowledge of creditor protection and company wind-up procedures. The core distinction between liquidation types hinges on shareholder consent: voluntary liquidation occurs when members vote to wind up the company, whilst compulsory liquidation is imposed by external force. Both result in the company's formal dissolution—necessary because companies have perpetual succession and exist independently of their directors or shareholders. Administration differs fundamentally: rather than ending the company, it's a rescue mechanism designed to turn around a struggling business and preserve it as a going concern, even when it cannot currently meet its obligations.
Duration: 2m
Transcript
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