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Business Liquidation

Business Liquidation

When a company needs to be closed, the directors will usually achieve this by engaging a licensed Insolvency Practitioner to initiate a voluntary liquidation.

If the company is solvent, that is, able to pay all its debts, this process is controlled by its Members (e.g. shareholders) and is known as a Members' Voluntary Liquidation (MVL).

If the company is insolvent, with no realistic prospect of recovery, the directors will need to ensure that they comply with their statutory duties. This often involves the directors instructing us to initiate a Creditors' Voluntary Liquidation (CVL).

To avoid the personal consequences of trading whilst insolvent it is important for the directors to consult a licensed Insolvency Practitioner as soon as possible. We can advise on the actions needed to avoid accusations of wrongful trading and to limit directors’ personal liability.

If no action is taken, creditors can initiate a Compulsory Liquidation through the Courts.

members’ voluntary liquidation (mvl)

We can act as liquidators when the directors of a company wish to formally wind-up a solvent company that has served its purpose. Members' Voluntary Liquidation (MVL) can be used for many and varied reasons. These range from the consequences of corporate restructuring following acquisitions, etc., to simply facilitating the retirement of a sole shareholder/director.

We will work with the company’s accountants and tax advisors to extract shareholders’ investment in a tax efficient manner. As liquidators we are responsible for the realisation of the company’s assets, settlement of the company’s remaining debts and the subsequent distribution of surplus funds to the company’s shareholders.

Whatever your circumstances our team are available to help; full contact details can be found on our contact us page.

creditors’ voluntary liquidation (cvl)

If a company is insolvent, and there is no prospect of all or a part of it being rescued, a Creditors’ Voluntary Liquidation (CVL) is likely to be the most appropriate way of formally closing the business. A CVL is a formal procedure which involves the directors of an insolvent company voluntarily choosing to bring their business to an end, and to wind the company up.

We will assist the directors to fulfil their duty to wind up the company throughout the CVL procedure; the first stage of which is to inform the shareholders that the company is insolvent and must cease trading. A shareholders’ meeting must be held to appoint a licensed Insolvency Practitioner to wind up the company. This decision must be ratified by creditors in a formal decision-making procedure.

Once appointed the Liquidator assumes control of the company and all its assets. The Liquidator is responsible for realising the assets, distributing proceeds to creditors and the formal winding up and dissolution of the company.

Liquidation can help to end the worry financial distress can cause as, once appointed, it is the Liquidator’s responsibility to deal with the company’s creditors and to maximise the value of the company’s assets for the benefit of creditors.