ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More
ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More
Frequently asked questions
What is the difference between Creditors Voluntary Liquidation (CVL) and Members Voluntary Liquidation (MVL)?
A Creditors Voluntary Liquidation (CVL) is used for an insolvent company that cannot pay its debts, where directors choose to place the company into liquidation to avoid compulsory winding up by creditors. A Members Voluntary Liquidation (MVL) is for a solvent company that wishes to close, typically for tax efficiency when shareholders want to extract retained profits as capital rather than income. In an MVL, directors must swear a statutory declaration of solvency, confirming the company can pay all debts within 12 months. The process and implications differ significantly, so it's essential to get professional advice.
How much does company liquidation cost in Ashford, Kent?
The cost of liquidation varies depending on the complexity of the company's affairs, the number of creditors, and whether it is a CVL or MVL. Typically, fees for a CVL range from £3,000 to £6,000 plus VAT, while MVLs can be slightly higher due to additional legal work. Our fees are agreed upfront and fixed, with no hidden charges. We offer a free initial consultation to provide a precise quote after reviewing your company's financial position. In many cases, the cost can be met from the company's assets or director's loan account offsets, but we will explain all options clearly.
Can I continue trading if my company is in liquidation?
No. Once a company enters liquidation, the appointed liquidator takes control of the company's assets and affairs. Directors lose their powers to trade or make decisions on behalf of the company. The liquidator's role is to realise assets, investigate the company's affairs, and distribute funds to creditors. However, there are alternatives to liquidation, such as a Company Voluntary Arrangement (CVA) or administration, which may allow the business to continue trading under certain conditions. Our advisors can discuss these options with you to see if any are viable for your situation.
What are the legal duties of directors during insolvency in the UK?
Directors have a legal duty to act in the best interests of creditors once a company becomes insolvent. This means they must avoid wrongful trading, which occurs when they continue to incur debts while knowing there is no reasonable prospect of avoiding liquidation. Directors must also not show preference to certain creditors, dispose of assets at undervalue, or use company funds for personal benefit. Failure to comply can lead to personal liability, disqualification, or even criminal prosecution. Seeking professional advice early is crucial to ensure you meet your obligations and protect your position.
Will I be personally liable for company debts after liquidation?
In most cases, no. Limited liability protects directors from personal responsibility for company debts, provided they have not given personal guarantees, acted fraudulently, or been involved in wrongful trading. If you have given a personal guarantee for a business loan or lease, the lender may pursue you for the outstanding amount. Additionally, if you have taken money from the company that is not properly documented as salary or dividends, the liquidator may seek repayment. Our experts will review your situation and advise on any potential risks before you proceed with liquidation.
How long does the liquidation process take in Ashford, Kent?
The length of a liquidation depends on the company's complexity. A straightforward CVL or MVL can often be completed within 6 to 12 months, but this can extend if there are complex asset realisations, legal disputes, or investigations. The initial meeting of creditors and appointment of the liquidator typically occurs within a few weeks of instruction. After that, the liquidator must file reports, realise assets, and distribute dividends. We provide regular updates throughout the process and aim to conclude matters as efficiently as possible while ensuring compliance with insolvency law.
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