Expert Company LiquidatorsServing Farnworth Businesses

A creditors' voluntary liquidation (CVL) is initiated by the directors when the company is insolvent, and shareholders pass a resolution to wind up. A compulsory liquidation is a court order obtained by a creditor or other party. Both result in the company being wound up, but the process and control differ significantly.

The cost of a CVL is typically funded by the company's assets, but if assets are insufficient, directors may need to contribute to cover the fees. Fees vary depending on the complexity of the case and the size of the company. Always obtain a clear, fixed fee quote before instructing a licensed insolvency practitioner.

A company must be insolvent, meaning it cannot pay its debts as they fall due, or its liabilities exceed its assets. Directors must also pass a board resolution and obtain shareholder approval for a CVL. A licensed insolvency practitioner will assess the company's financial position to confirm eligibility and recommend the most suitable procedure.

The initial meeting with creditors typically occurs within a few weeks of the decision to liquidate. The liquidation process itself can take several months to a year or more, depending on the complexity of the company's affairs, the realisation of assets, and the investigation into the directors' conduct.

Alternatives include a company voluntary arrangement (CVA), administration, or informal restructuring with creditors. A CVA allows the company to repay debts over a period while continuing to trade. Administration provides a moratorium from creditors while a restructuring plan is developed. A licensed insolvency practitioner can explain which option may be viable for your company.

Employees are made redundant when a company enters liquidation. They may be entitled to claim statutory redundancy pay, unpaid wages, holiday pay, and other entitlements from the National Insurance Fund. The liquidator will provide employees with the necessary forms and guidance on how to make a claim.

No. Once a company enters liquidation, the liquidator takes control of the company's affairs, and trading must cease immediately, except for the purpose of winding up the business in an orderly manner. The directors' powers cease, and the liquidator is responsible for realising assets and distributing funds to creditors.

A licensed insolvency practitioner acts as the liquidator, taking control of the company's assets, investigating its affairs, and ensuring that creditors are paid in the correct order of priority. They also have a duty to report any wrongful trading or misconduct by directors to the relevant authorities.

In most cases, directors are not personally liable for company debts if they have acted properly. However, if you have given personal guarantees, you may be liable for those specific debts. Also, if you have traded wrongfully or fraudulently, a court may order you to contribute to the company's assets.

Look for a licensed insolvency practitioner who is a member of a recognised professional body, such as the Insolvency Practitioners Association or the ICAEW. Check their experience with similar companies, read client testimonials, and ask for a clear breakdown of fees. You can also connect with a specialist listed on AccountingFirms to get guidance.