Companies Act 2014 section 582

Protections and remedies for creditors in cases where declaration of solvency made

Section 582 sets out the protections and remedies available to creditors of a company that has passed a resolution to wind up voluntarily, where the directors have made a declaration of solvency.

• Creditors representing at least one-fifth in number or value of the company's creditors may apply to court to convert a members' voluntary winding up into a creditors' voluntary winding up, if the court believes the company is unlikely to pay its debts within the timeframe stated in the solvency declaration.
• The court application must be made within 30 days of the date on which the voluntary winding-up resolution was advertised.
• If the court grants the order converting the winding up, the existing liquidator (or, if none is acting, the company itself) must file a certified copy of the order with the Registrar within 21 days, and failure to do so is a category 4 offence.
• Civil sanctions apply to directors who made the solvency declaration without reasonable grounds for their opinion that the company could pay its debts within the stated period.

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