公司法outcome4.doc

1.0 Introduction This report discuss about the issue that what are insolvency, and discuss about voluntary liquidation,compulsory liquidation and administration. And there are some definitions about them in the report . It will help the stuff to know about the bankruptcy procedure. 2.0 Findings 2.1 the definition of insolvency The term insolvent is defined by the Collins English Dictionary as : having insufficient assets to meet debts and liabilities. This may apply in the following ways: where debts and liabilities exceed assets；where there is failure to pay a debt which resulted from successful legal proceedings ; and where there is failure to pay,compound or secure an undisputed debt within three weeks of formal demand 2.2 The main courses of action When a UK company finds itself in financial trouble.Legally there are three maincrouts of action available to the Board. There are Voluntary Liquidation,Compulsory Liquidation and Administration.Voluntary Liquidation is governed by Section 84 of the Company Act 1985.If the Company resolves that it cannot continue in business as a result of unmanageable debts,then it can be voluntarily wound up.The company must pass a resolution and the company secretany must then past a notice in the London Gozette（special newspaper)within two weeks in order to inform suppliers,creditors, customers and the general public.Voluntary minding up can be done in two ways : members voluntary minding up and Creditors voluntary minding up. Compulsory Liquidation is a court order is botained forcing the company to mind up.It would be initiated by a creditor or a shareholder or by certain Government representatives.Reasons for compulsory liquidation are given in section 122(1) of the insolvency Act 1986 and include the following;The company has asked for a compulsory liquidation.A special resolution has resolved that the company be mound up by the court;it is a public company but has still not been issued with a trading certificate (Sectio