Guidance

Liquidation and insolvency: companies registered in Northern Ireland

Updated 10 March 2022

Applies to Northern Ireland

• Publication for England
• Publication for Scotland
• Publication for Wales

This guidance provides a basic overview of insolvency proceedings and more detailed information about the documents you must send to Companies House under:

• The Insolvency (Northern Ireland) Order 1989
• The Insolvency Rules (Northern Ireland) 1991

It summarises some of the rules that apply to:

• moratoria
• company voluntary arrangements
• administrations
• receivers
• voluntary liquidations
• compulsory liquidations

Due to the complexity of the requirements, this guide will not be able tell you everything you need to know about insolvent companies.

You should seek independent professional advice if you suspect your company is, or is about to become, insolvent. You should also contact the Insolvency Service.

We can help with queries about what documents you must send to Companies House, such as what notice to file when an administrator has been appointed.

The relevant legislation can be found in:

• The Insolvency (Northern Ireland) Order 1989
• The Insolvency Rules (Northern Ireland) 1991
• The Insolvency (Amendment) Rules (Northern Ireland) 2013
• The Companies Act 2006
• Corporate Insolvency and Governance Act 2020

1.  Insolvency proceedings

Insolvency proceedings are formal measures taken to deal with company debt. There are many different types of company insolvency proceedings. We cover all of them in this guidance.

It’s important to note that not all companies involved in insolvency proceedings are insolvent.

The parts of this guide covering compulsory winding-up and receivers (including administrative receivers) apply to registered and unregistered companies (including overseas companies).

The parts of this guide covering voluntary winding-up and administration orders do not apply to unregistered companies, which cannot be wound up by these methods.

1.1 Companies can be dissolved without going through insolvency proceedings

If we have reason to believe that a company is not carrying on business or is not in operation, its name may be struck off the Companies House register and dissolved without going through liquidation.

A private company that’s not trading may apply to be struck off the Companies House register. This procedure is not an alternative to formal insolvency proceedings.

See our guidance for more information about strike off, dissolution and restoration.

1.2  Supervising insolvency procedures

All liquidators, administrators, administrative receivers and supervisors taking office must be authorised insolvency practitioners.

Receiver managers, receivers and nominees appointed to manage a company voluntary arrangement moratorium do not have to be authorised.

Insolvency practitioners may be authorised by the:

• Chartered Association of Certified Accountants
• Insolvency Practitioners’ Association
• Institute of Chartered Accountants in England and Wales
• Institute of Chartered Accountants in Ireland
• Institute of Chartered Accountants of Scotland

1.3  Directors of an insolvent company

The liquidator, administrative receiver, administrator or official receiver has a duty to send a report to the Department for the Economy (Northern Ireland) on the conduct of all directors who were in office in the last 3 years of the company’s trading.

The Department for the Economy (Northern Ireland) must decide whether it’s in the public interest to seek a disqualification order against a director.

Examples of the most commonly reported conduct are:

• continuing the company’s trading when the company was insolvent
• failing to keep proper accounting records
• failing to prepare and file accounts or make returns to Companies House
• failing to send in returns or pay to the Crown any tax that is due

2.  Moratorium

A moratorium provides struggling businesses a formal breathing space. It prevents the company’s creditors from proceeding against the company during this time. During a moratorium no legal action can be taken against a company without leave of the court.

2.1  Obtaining a moratorium

The directors must apply to the court for a moratorium. The moratorium will normally last for a period of 28 days and will be managed by a nominee, who may (or may not) be a registered insolvency practitioner.

2.2  What we need

The nominee must deliver notice of the moratorium to us. You must notify us if the moratorium ends, or is:

• extended

• further extended

• renewed

• being continued

At the end of a moratorium a company may (or may not) proceed to a CVA.

Access the full list of forms for moratorium.

3.  Company voluntary arrangements (CVA)

A CVA is when a company makes an agreement with its creditors. This arrangement must be approved by the court, in which the company has formally agreed terms with its creditors for the settlement of its debts.

3.1 Proposing a CVA

A CVA may be proposed by the:

• administrator, where the company is in administration
• liquidator, if the company is being wound up
• directors, in other circumstances

3.2  Considering the proposal

Where the nominee is not the administrator or liquidator, they must deliver notice of consent to the proposer as soon as possible after receiving the proposal.

Within 28 days of receipt the nominee must submit a report to the court.

3.3  Approving a proposal for a CVA

The nominee must invite members of the company to consider a proposal by summoning a meeting and inviting creditors to consider the proposal by a decision procedure.

3.4  Once the CVA is approved

If the members and creditors approve the arrangement, then the nominee or their replacement becomes the supervisor of the arrangement.

3.5  What we need

The supervisor must send us a copy of the chair’s report of the meeting attached to Form 1.01.

The supervisor must send reports on the progress and prospects for the full implementation of the voluntary arrangement to all interested parties including Companies House, every 12 months starting from the date the CVA was approved.

3.6  Termination or full implementation

When the arrangement is completed or terminated, the supervisor must send us a copy of the notice to creditors and the supervisor’s report within 28 days after final completion or termination of the voluntary arrangement.

If the arrangement is suspended or revoked, you must tell us by filing the appropriate form.

Form number	Form title
1.01	Notice to registrar of companies of voluntary arrangement taking effect
1.02	Notice to registrar of companies of order of revocation or suspension of voluntary arrangement
1.03	Notice to registrar of companies of supervisor’s abstract of receipts and payments
1.04	Notice to registrar of companies of completion or termination of voluntary arrangement

These forms are not available from Companies House. You can get them from the relevant legislation or from The Stationery Office (TSO).

4. Administration

Administration provides breathing space to allow a rescue package or more advantageous realisation of assets to be put in place.

An administrator is appointed to manage a company’s affairs, business and property for the benefit of the creditors.

The person appointed must be an insolvency practitioner and have the status of an officer of the court (whether they’re appointed by the court, or not).

The objective of administration is to:

• rescue a company as a going concern
• achieve a better price for the company’s assets or otherwise realise their value more favourably for the creditors as a whole than would be likely if the company were wound up (without first being in administration)
• in certain circumstances, realise the value of property in order to make a distribution to one or more preferential creditors

4.1  Companies entering administration

A company enters administration when the appointment of an administrator takes effect. An administrator may be appointed by:

• an administration order made by the court
• the holder of a floating charge
• the company or its directors
• the liquidator of a company
• the supervisor of a CVA
• a designated office of a magistrate’s court

The administrator must perform their functions as quickly and efficiently as reasonably practicable in the best interests of the creditors as a whole.

4.2  Notification when a company is in administration

As soon as reasonably practicable, an administrator must send a notice of their appointment to the company and each of its creditors and publish notice of their appointment.

The administrator must also send a notice of their appointment to:

• Companies House
• the Belfast Gazette
• a newspaper in the area where the company has its principal place of business

While a company is in administration, every business document issued by or on behalf of the company or the administrator must state the name of the administrator and that they’re managing the affairs, business and property of the company.

4.3  The process of administration

Soon after their appointment, the administrator will request a statement of the company’s affairs from the relevant people - such as an officer or employee of the company.

As soon as reasonably practicable and before the end of 8 weeks after the company enters administration, the administrator must make a statement setting out proposals for achieving the purpose of the administration or explaining why they cannot be achieved.

The proposals may include a voluntary arrangement or a compromise or arrangement with creditors or members.

The statement setting out the proposals must be sent to:

• Companies House on form 2.17B
• every creditor of the company with an invitation to an initial creditors’ meeting, if one is to be held
• every member of the company, unless the administrator publishes a notice to the effect that they will provide a copy free of charge to any member of the company who applies in writing for a copy

Creditors will be asked to approve (with or without modifications) the statement of proposals. Following the initial meeting the administrator may form a creditors committee. The administrator must notify creditors of any revisions to the proposals.

You must report any decisions taken by creditors to us.

4.4  When administration ends

There are several ways administration can end.

Administration can end automatically one year from the date the administration took effect. You must notify us. But the administration may be extended with the consent of creditors or the court. You must file any extension with Companies House on form 2.31B.

An administrator who thinks that the purpose of administration has been sufficiently achieved must file a notice with the court and Companies House.

An administrator appointed under a court order may apply to the High Court to end administration if they think:

• the purpose of the administration cannot be achieved
• the company should not have entered administration
• a creditors’ meeting requires the application

The court will discharge the administration order and the administrator must notify us on form 2.33B.

An administrator appointed by the holders of a floating charge, or by the company or its directors, may end administration when the purpose of administration has been sufficiently achieved. The administrator must file notice with the court and with us on form 2.32B.

The administration may end on the application of a creditor to the High Court alleging an improper motive on the part of the person who appointed the administrator, or applied to the High court for an administration order. The administrator must send a copy of the order with form 2.33B to us within 14 days of the order being made.

The administration may end when the company moves into creditors’ voluntary winding up. This can happen where the administrator thinks that each secured creditor is likely to be paid and a distribution will be made to unsecured creditors, if there are any. The administrator must notify us on form 2.34B and send copies to the High Court and each creditor. The company will then be wound up - as if a resolution for voluntary winding up had been passed on the day the notice is registered with Companies House.

Administration may end and move into dissolution. This can happen if the administrator thinks that a company has no property with which to make a distribution to its creditors. The administrator must send notice to us and the company will be dissolved 3 months after we register the form, unless an order is made to:

• extend or suspend the period

• stop the dissolution

You must notify us of any order.

4.5  Administration can be converted to creditors voluntary liquidation (CVL)

The administration can be converted to CVL where the administrator of a company thinks the total amount each secured creditor of the company is likely to receive has been paid or set aside to them and that a distribution will be made to unsecured creditors of the company (if there are any).

The administrator must send form 2.34B Notice of move from administration to creditors voluntary liquidation. Once we register the form, you must also file form VL1 Notice of appointment of liquidator. The appointment of the liquidator must not be before the date the company went into liquidation (the date of registration of form 2.34B).

A company converts to CVL from the date of registration of form 2.34B. It’s helpful to tell us on a covering letter that you’re filing the form VL1 for a case where the company has moved from administration to CVL.

4.6  Administration forms

You must file these forms with us for administration cases.

Form number	Form title
2.12B	Notice of administrator’s appointment
2.16B	Notice of statement of affairs
2.17B	Statement of administrator’s proposals
2.18B	Notice of extension of time period
2.18BA	Notice of deemed approval of proposals
2.22B	Statement of administrator’s revised proposals
2.23B	Notice of result of meeting of creditors
2.24B	Administrators progress report
2.26B	(Amended) certificate of constitution of creditors’ committee
2.27B	Notice by administrator of a change in committee membership
2.28B	Notice of order to deal with charged property
2.30B	Notice of automatic end of administration
2.31B	Notice of extension of period of administration
2.32B	Notice of end of administration
2.33B	Notice of court order ending administration
2.34B	Notice of move from administration to creditors voluntary liquidation
2.35B	Notice of move from administration to dissolution
2.36B	Notice to registrar of companies in respect of date of dissolution
2.38B	Notice of resignation by administrator
2.39B	Notice of vacation of office by administrator
2.40B	Notice of appointment of replacement/additional administrator
VL1	Notice of appointment of liquidator voluntary winding-up (members or creditors)

These forms are not available from Companies House. You can get them from the relevant legislation or from The Stationery Office (TSO).

5. Receivers

There are different kinds of receiver and their powers vary according to the terms of their appointment.

An administrative receiver is a receiver or manager of the whole, or substantially the whole, of a company’s property who is appointed by or on behalf of the holders of any debentures of the company secured by a floating charge. They have the power to sell, or otherwise realise, the assets covered by the floating charge and apply the proceeds of the debt owed to the charge holder.

Receivers who are not administrative receivers may be appointed in other circumstances. For example, under powers contained in an instrument or document creating a charge over a company’s property, a receiver or manager may be appointed until the debt is recovered.

5.1  Notice of the receiver’s appointment

The person who appoints the administrative receiver, receiver or manager, or has them appointed under the powers contained in an instrument, is responsible for informing us within 7 days of the appointment. A form RM01 is required for each separate charge registered at Companies House over which the Receiver is appointed, whether the appointment is over part of the property or all the company’s assets.

An administrative receiver must also publish notice of their appointment in the Belfast Gazette and in an appropriate newspaper.

When the administrative receiver, receiver or manager ceases to act they must notify us with a form RM02.

You must file separate forms RM01 and RM02 for each separate charge registered at Companies House over which a receiver is appointed or ceases to act, whether the appointment is over part of the property or all the company’s assets.

5.2  What the receiver sends to us

Within 3 months of appointment, an administrative receiver must make a report to:

• Companies House
• the company’s creditors
• the holders of a floating charge
• any trustees for secured creditors of the company

The report must explain the circumstances of the appointment and the action the administrative receiver is taking. The report must also include a summary of any ‘statement of affairs’ prepared for the receiver by the officers or employees of the company.

 Statement of affairs

This is a summary of the company’s assets, liabilities and creditors. The administrative receiver decides whether it’s needed and who should prepare it.

Receipts and payments

All receivers must send an account of receipts and payments for the first 12 months of receivership to us, and:

• for administrative receivers, at 12-monthly intervals thereafter
• for receivers and managers, 12 months after the date of appointment and every subsequent 6 months

5.3  Forms for receivers

Form number	Form title
RM01	Notice of the appointment of receiver or manager
RM02	Notice of ceasing to act as receiver or manager
3.05	Statement of affairs in administrative receivership following report to creditors
3.06	Certificate of constitution (amended certificate) of creditors’ committee
3.07	Administrative receiver’s report as to change in membership of creditors’ committee
3.08	Receiver or manager or administrative receiver’s abstract of receipts and payment
3.09	Notice of administrative receiver’s death
3.10	Notice of order to dispose of charged property
3.12	Administrative receiver’s report

Apart from the RM01 and RM02, these forms are not available from Companies House. You can get them from the relevant legislation or from The Stationery Office (TSO).

6. Voluntary liquidation

There are 2 kinds of voluntary liquidation:

• members’ voluntary liquidation (MVL) - which means the directors have made a statutory declaration of solvency
• creditors’ voluntary liquidation (CVL) - which means that the directors have not made such a declaration

6.1  When a company can go into MVL

This can take place when the directors of a company believe that the company is solvent.

A majority of the company’s directors must make a statutory declaration of solvency in the 5 weeks before a resolution to wind up the company is passed.

6.2  The statutory declaration

The statutory declaration states that the directors have made a full inquiry into the company’s affairs. It also states that after the inquiry, they believe that the company will be able to pay its debts, in full, within 12 months from the start of the winding-up.

The declaration includes a statement of the company’s assets and liabilities - as at the latest practicable date before making the declaration.

6.3  The start of liquidation

The liquidation starts when the members, in a general meeting, pass a special resolution to wind up the company voluntarily.

6.4  Giving notice of voluntary liquidation

Notice of the special resolution for voluntary winding-up of the company must be published in the Belfast Gazette within 14 days of the general meeting.

The company must also send a copy of the declaration of solvency (form 4.71) and the special resolution to us within 15 days of the general meeting.

6.5  When a CVL is appropriate

A company may go into CVL when it cannot pay its debts.

6.6 What the company must do

The company passes a special resolution to say that it cannot continue in business because of its liabilities and that it’s advisable to wind up.

The resolution must be:

• advertised in the Belfast Gazette within 14 days
• sent to Companies House within 15 days

A meeting of creditors must be held in the next 14 days after passing the resolution. Notice of the meeting must be sent to the creditors at least 7 days before the meeting. The directors must prepare a statement of affairs for consideration at the meeting and appoint one of them to attend and preside over the meeting.

When the liquidator is appointed, the directors must provide them with a statement of affairs and co-operate with the liquidator.

6.7  Advertising the meeting

The meeting must be advertised in the Belfast Gazette and in 2 newspapers in the area where the company has its principal place of business.

6.8  The main duties of a liquidator

The liquidator is appointed to wind up the company’s affairs. The liquidator does this by calling in all the company’s assets and distributing them to its creditors.

6.9  Notification of a liquidator’s appointment

Within 14 days of being appointed, a liquidator must publish a notice of appointment in the Belfast Gazette and notify Companies House.

If the liquidation is voluntary, the liquidator must also give notice in a newspaper in the area where the company has its principal place of business.

6.10  What the liquidator must send to us

The liquidator must send a statement of affairs and form 4.21 to us within 7 days of the creditors’ meeting.

The liquidator must also send a statement of receipts and payments (form 4.69) at 12 monthly intervals until the liquidation is concluded.

6.11  Converting a MVL into a CVL

If the liquidator decides that the company will not be able to pay its debts, in full, in the period stated in the directors’ statutory declaration of solvency, they must call a meeting of the creditors. The meeting must be held within 28 days. The liquidation becomes a CVL from the date of the meeting.

6.12  The requirements for giving notice in such a case

The liquidator must:

• post a notice of the meeting to each creditor at least 7 days before the date of the meeting
• advertise the date of the meeting in the Belfast Gazette and in 2 newspapers in the area where the company has its principal place of business
• prepare a statement of affairs for consideration at the meeting - a copy of the statement must be sent to Companies House within 7 days of the meeting

6.13  What happens when the company’s affairs are fully wound up

The liquidator presents an account to a final meeting of creditors and members of the company. They must advertise the meeting in the Belfast Gazette at least one month before.

Within one week of the meeting having taken place, the liquidator must send the account and a return of the final meeting to us.

Unless the court makes an order deferring the dissolution of the company, it’s dissolved 3 months after the return and account are registered with us.

6.14  Forms for voluntary liquidation

You must file these forms with us for voluntary liquidations.

Form number	Form title
VL1	Notice of appointment of liquidator voluntary winding-up (members or creditors)
4.19 & 4.21	Statement of affairs in conversion from a members’ voluntary to a creditors’ voluntary liquidation
4.20 & 4.21	Statement of affairs in a creditors’ voluntary liquidation
4.34	Notice of resignation as voluntary liquidator under Article 145(5) of the Insolvency (Northern Ireland) Order 1989
4.36	Notice of order of court granting liquidator leave to resign
4.39	Certificate of removal of voluntary liquidator
4.41	Notice of ceasing to act as voluntary liquidator
4.45	Notice of death of voluntary liquidator
4.47	Notice of vacation of office by voluntary liquidator
4.49	Notice of constitution of liquidation committee
4.52	Certificate that creditors have been paid in full
4.69	Liquidator’s statement of receipts and payments
4.70	Order of court on appeal against Department of Enterprise, Trade and Investment’s Decision under Article 168(4) or 169(3) of the Insolvency (Northern Ireland) Order 1989
4.71	Members’ voluntary winding-up declaration of solvency embodying a statement of assets and liabilities
4.72	Return of final meeting in a members’ voluntary winding-up
4.73	Return of final meeting in a creditors’ voluntary winding-up

These forms are not available from Companies House. You can get them from the relevant legislation or from The Stationery Office (TSO).

7. Compulsory liquidation

Compulsory liquidation of a company is when the company is ordered by a court to be wound up.

7.1  Courts that can order a compulsory liquidation

The High Court may order the winding-up of a company. For example, this may be on the petition of a creditor or creditors on the grounds that the company cannot pay its debts.

A company is regarded as unable to pay its debts if, for example, a creditor:

• is owed more than £750
• presents a written demand in the prescribed form (known as a statutory demand) to the company
• the company fails to pay, secure or agree a settlement of the debt to the creditor’s reasonable satisfaction

There are other situations where a company is deemed unable to pay its debts. You can find more information in:

• The Insolvency (Northern Ireland) Order 1989
• The Insolvency Rules (Northern Ireland) 1991^

The court may also order the company to be wound up on the petition of:

• the company itself
• the company’s directors or one or more members
• Department for the Economy (Northern Ireland)
• the official receiver

7.2  Information on the public record

Unless the court directs other arrangements, you must advertise the petition in the Belfast Gazette.

If the petition is successful, the official receiver must deliver a copy of the winding-up order to us and it will be placed on the company’s public record.

The petition is not presented to us and does not appear on the public record.

7.3  When the official receiver becomes liquidator

The official receiver becomes liquidator on the making of a winding-up order against a company, unless the court orders otherwise.

7.4  The duties of the official receiver

When a winding up order is made, the official receiver becomes liquidator unless and until an insolvency practitioner is appointed in their place. The exception to this is where the court has appointed a former administrator or supervisor under a voluntary arrangement, as liquidator the time of the winding up.

The official receiver retains their duty to:

• investigate the company’s affairs and the causes of its failure.
• report to creditors
• report on the company officers’ conduct

They also decide whether to call meetings of the creditors and contributories. Contributories are people liable to contribute to the assets of the company if it’s wound up, for the purpose of appointing a liquidator in their place. The liquidator must notify us of their appointment on form 4.32.

If they decide not to call meetings, they must notify the creditors, contributories and the court of this decision.

If the position of liquidator becomes vacant at any time, the official receiver becomes the liquidator for the duration of the vacancy.

7.5  When the winding-up is complete

When we receive notice from the liquidator of the final meeting of creditors (form 4.44) or notice from the official receiver that winding-up is complete, we’ll register it and publish its receipt in the Belfast Gazette.

Unless the Department for the Economy (Northern Ireland) directs otherwise, the company is dissolved 3 months after the notice is registered with us.

If the official receiver, acting as liquidator, is satisfied that the company’s realisable assets (assets which could be sold or disposed of to raise money) will not cover the expenses of winding-up and that no further investigation of the company’s affairs is necessary, they may apply for early dissolution of the company. The company is dissolved 3 months after the application is registered with us.

7.6  Forms for compulsory liquidation

Where a liquidator has been appointed in place of an official receiver, you must file:

• 4.32 - Notice of appointment of liquidator in winding up by the court
• 4.44 - Notice of final meeting of creditors

These forms are not available from Companies House. You can get them from the relevant legislation or from The Stationery Office (TSO).

8.  UK Societas

Insolvency proceedings that apply to a PLC also apply to a UK Societas.

See our guidance on UK Societas.