Voluntary Liquidation Procedure in Guernsey

Under Guernsey Law a company may be wound up voluntarily if:

•The period (if any) fixed by the memorandum or articles setting out the duration of the company expires
•An event (if any) occurs on the occurrence of which the memorandum or articles provide that the company be dissolved
For each of the above, there is a proviso that the company passes an ordinary resolution that it be wound up voluntarily.
Further, a company can be wound up voluntarily if:
•It passes a special resolution that it be wound up voluntarily

Once the decision has been made to place the company into voluntary liquidation, for whatever appropriate reason, then the necessary resolutions will need to be filed at the Guernsey Registry within thirty days of them being approved. It should be noted that under The Companies (Guernsey) Law, 2008, all special resolutions need to be filed at the Registry within thirty days. In the case of voluntary liquidations ordinary resolutions also need to be filed within thirty days. At this point, the Registrar will publish notice of the proposed voluntary liquidation of the company, 'in such manner and for such period as he thinks fit'.

Once the resolutions have been filed, and if the decision has not already been made, then a Liquidator should be appointed and their remuneration agreed. Fees are usually charged on a time spent basis. Unlike the UK, in Guernsey there is no requirement for an appropriately qualified individual such as an Insolvency Practitioner to conduct the liquidation. However, good sense dictates that such individual appointed will have good knowledge of the Guernsey Law and has a track record in acting as a Liquidator for this jurisdiction.

When the company is formally placed into liquidation, it shall cease to carry on business, 'except in so far as may be expedient for the beneficial winding up of the company.' The powers of the director(s) also cease, unless a direction to the contrary is sanctioned by the Liquidator or the company in general meeting.

It is the Liquidators' role to bring the company to a formal end, realising the assets, settling any liabilities and thereafter distributing any surplus assets according to the provisions of the Law. When the affairs of the company have been fully wound up, then the Liquidator should present his statement or account of the winding up to a final general meeting of the company. Following the meeting the Liquidator will advise the Registrar who will publish notice of the same, and advising that the company is to be dissolved.

Practical Company Secretarial Services have had considerable experience conducting liquidations under Guernsey Law, both for ICC's and Funds.
For more details please contact sam@practicalcompanysecretary.co.uk