Liquidation, whether compulsory or voluntary, can be complex and a bit of a headache for Directors. Our experts are on hand to help and offer guidance on any implications you may face.
We understand that not every business is the same. Whatever the situation you’re facing, you need a plan that’s right for you. That’s where we come in, our specialist team will take the time to understand your situation and business and then formulate the best solution going forward.
What is liquidation?
Although many assume that liquidation is only applicable to businesses that are insolvent, this is not always the case. Liquidation is a process which works for both solvent and insolvent companies that have reached the end of their life.
Whether your company is profitable, or insolvent, our experts are here to help guide you through the process, using all the skills at our disposal. When it comes to liquidation, there are three main types:
Members Voluntary Liquidation (MVL)
An MVL is a solvent liquidation process where the members of a financially stable business decide to voluntarily wind up the company to maximise its assets for shareholders. An MVL is primarily used as a tax efficient method in which shareholders can extract surplus funds from a business that has naturally reached the end of its trading cycle.
Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure which involves the Board of Directors and Stakeholders voluntarily choosing to wind up their company. A CVL can only be entered into via a licensed Insolvency Practitioner. As such we can help you assess your financial position and, if a CVL is the best option, we can help initiate the liquidation of your company.
Creditors (who are owed over £750) that have exhausted all avenues to recover money that’s owed to them can, via winding-up petition, ask the court for your company to be placed into Compulsory Liquidation. There are significant consequences in being served with a winding up petition, therefore immediately upon receipt, it is highly recommended that you speak with a licensed Insolvency Practitioner for advice.
At a glance, liquidation provides the following;
- Provides an orderly wind down of the business, by a licenced professional
- Employees can submit redundancy pay claims through government schemes
- Removes pressure from all creditors
- Prevents further legal action being taken against you
- Allows time for realisation of company assets, ensuring that creditors receive the best possible return in terms of repayment of debt owed
- Offers a complete, clean break for directors to move on from the company.
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