Solvent & Insolvent Liquidation
Creditors Voluntary Liquidation | Compulsory Liquidation
Members Voluntary Liquidation
Listed below are the three types of liquidation procedures we offer advice on to company directors:
We can explain the pros and cons of each procedure and which is best suited to you in the current circumstances.
Creditors Voluntary Liquidation
A Creditors Voluntary Liquidation is where a business can no longer be made profitable or the owner does not wish to continue trading. A CVL process formally winds up insolvent businesses or companies.
Once Directors or partners in an LLP chose to bring the company into a CVL, a meeting of creditors and a meeting of shareholders will take place. After this the licensed Insolvency Practitioner or appointed liquidator takes control.
All of our Insolvency Practitioners are fully licensed and can hold your hand throughout this liquidation process and help you to put your company into liquidation and ensure that you are complying with your statutory duties as a company director.
Rather than a Creditors Voluntary Liquidation process, this is a Court driven process; it is a formal insolvency procedure. If a winding-up petition is lodged to start a Compulsory Liquidation by one of your creditors. You should seek advice from an authorised Insolvency Practitioner urgently as it could mean the beginning of the end for the company, don’t leave it too late and lose all company assets.
If your limited company or LLP is served with a winding-up order you must be given 14 days written notice of the Court hearing date.
This is advertised in the London Gazette and your bank will see it and freeze your bank account. If your business is facing Compulsory Liquidation or you are in doubt, contact us today. We can help you find a positive outcome.
Members Voluntary Liquidation
A voluntary process is available for solvent companies as an alternative to an ordinary dissolution of a company.
The benefits of a Members Voluntary Liquidation as opposed to an ordinary dissolution of the company are that the Directors/Shareholders can often benefit by paying less tax on distributions of the assets as they can be entitled to claim Entrepreneur’s Relief. In addition, where the distributions are to be significant, some people prefer the certainty of a formal MVL to avoid the potential risk of an ordinary dissolution being subsequently unraveled. Changes to the law mean that in a lot of cases an MVL is the only option available to the Directors/Shareholders.
An MVL can achieve liquidation in a cost effective manner and could be the best solution for you.
Find out more about Members Voluntary Liquidation or contact us today.
When to consult us
The sooner we are consulted the sooner we can assist you in finding a way through the business difficulties you are facing. The later it is left, the fewer the options will be. The best time to consult is as soon as you become a distressed company and any financial difficulties become apparent. You don't want to be building up company debt, unpaid invoices and outstanding creditors through wrongful trading and end up an insolvent company in a difficult financial position facing legal action.
If you are a struggling company or have been affected by Covid 19, contact us now for confidential advice. We are a local business supporting local businesses covering all of Devon, Cornwall and Somerset.