Professional Company LiquidatorsServing Newcastle Upon Tyne

The cost varies depending on the complexity of the company's affairs, the number of creditors, and the value of assets. Creditors' Voluntary Liquidation is often funded from company assets. For a Members' Voluntary Liquidation, fees are usually agreed as a fixed quote based on the work involved. Always request a clear breakdown of fees before you sign an engagement letter.

Your company is legally insolvent if it cannot pay debts as they fall due, its liabilities exceed its assets, or it cannot pay statutory demands. A licensed insolvency practitioner will assess your balance sheet, cash flow position, and contingent liabilities. They will confirm whether formal liquidation is necessary or if an alternative rescue procedure is more appropriate.

The directors must convene a board meeting to pass a resolution that the company cannot continue trading. Then shareholders vote at a general meeting to approve the winding-up resolution. Creditors meet within 14 days to confirm the appointment of the liquidator. The appointed professional then takes control of assets, notifies all creditors, and distributes funds according to statutory priorities.

An MVL typically completes within six to twelve months, provided all asset disposals are straightforward and no unexpected creditor claims arise. The liquidator must wait two months after the notice is advertised in the Gazette before distributing assets. Once all debts are paid and the final meeting is held, the company is formally dissolved and removed from the register.

A CVA is a formal agreement with creditors to repay debts over a fixed period, often three to five years. It allows the company to continue trading under the supervision of an insolvency practitioner. This option is suitable when the underlying business is viable but suffers from cash flow pressure. Your adviser will compare the projected returns to creditors under both scenarios.

Employees are treated as preferential creditors for certain claims, including unpaid wages up to a statutory cap, holiday pay, and pension contributions. Any amounts above the cap are unsecured claims. The liquidator will also assist employees in making a claim to the National Insurance Fund for redundancy pay and other statutory entitlements which may be recoverable.

Continuing to trade whilst knowing the company is insolvent can lead to personal liability through wrongful trading claims. Directors may be required to contribute personally to company assets if they did not take every step to minimise losses to creditors. There is also the risk of disqualification from acting as a director for up to fifteen years.

Yes, an MVL is specifically designed for solvent companies. Directors must swear a statutory declaration of solvency confirming the company can pay all debts in full within twelve months. Shareholders then pass a special resolution to wind up voluntarily. This process is often used for tax planning purposes when extracting retained profits as capital rather than income.

The appointed liquidator must obtain the best reasonably obtainable price for all company assets. They will instruct independent valuers for property, plant, and machinery. Stock is often sold through auction or to trade buyers. Intellectual property and goodwill may require a specialist valuation. All sales are documented and reported to creditors in the final account.

Creditors may appoint a liquidation committee to supervise the liquidator's actions. The committee consists of up to five creditors who receive regular reports and approve certain decisions such as the liquidator's remuneration. This provides an additional layer of transparency and ensures the liquidation is conducted in the best interests of all parties involved.