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Frequently asked questions
What are the signs that my company in Alresford needs liquidation?
Common signs include inability to pay debts as they fall due, mounting creditor pressure, legal actions such as winding-up petitions, loss of key contracts, and consistent trading losses. If you are using director's loans or borrowing to cover operational costs, or if HMRC has issued a statutory demand, these are strong indicators that liquidation may be necessary. Early advice from a licensed liquidator can help you avoid personal liability and explore all options.
What is the difference between a Creditors Voluntary Liquidation (CVL) and a Members Voluntary Liquidation (MVL)?
A CVL is used when a company is insolvent and cannot pay its debts. It is initiated by directors and requires a meeting of creditors, who then approve the liquidation. An MVL is used when a company is solvent but the shareholders wish to close it, often for retirement or restructuring. In an MVL, a licensed insolvency practitioner distributes assets to shareholders after all debts are settled, which can be tax-efficient.
How long does the liquidation process take for a company in Alresford?
A Creditors Voluntary Liquidation typically takes between 6 to 12 months to complete, depending on the complexity of the company's affairs, such as asset realisation and creditor claims. A Members Voluntary Liquidation can be faster, often completed in 3 to 6 months. However, the timeline can vary based on how quickly financial records are provided and whether any legal disputes arise. Your liquidator will provide a realistic estimate after an initial review.
Can I continue to trade my company while it is being liquidated?
Once liquidation begins, the liquidator takes control of the company, and directors no longer have authority to trade. However, in certain circumstances, the liquidator may continue trading temporarily to sell stock or complete contracts for the benefit of creditors. If you are considering liquidation, it is crucial to stop taking on new credit and seek advice immediately to avoid wrongful trading claims.
What are the costs of hiring a company liquidator in Alresford?
The costs vary depending on the type of liquidation and the complexity of your case. For a CVL, fees are often based on a fixed fee or a percentage of assets realised, but they must be approved by creditors. In an MVL, fees are typically agreed with shareholders and can be a fixed fee. We provide transparent pricing upfront, and in many cases, the liquidator's fees can be paid from the company's assets, not out of your personal pocket.
Will I be personally liable for my company's debts after liquidation?
In most cases, directors are not personally liable for company debts if they have acted properly and not engaged in wrongful trading, fraudulent trading, or misappropriation of assets. However, if you have given personal guarantees for loans or leases, creditors can pursue you for those amounts. A licensed liquidator will review your conduct and advise you on potential risks. Taking early action can reduce the risk of personal liability.
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