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 a Creditors Voluntary Liquidation (CVL) and a Members Voluntary Liquidation (MVL) in Co Down?
A CVL is used for insolvent companies where directors cannot pay debts as they fall due. It is initiated by shareholders but controlled by creditors, and a licensed insolvency practitioner acts as liquidator to realise assets and distribute proceeds to creditors. An MVL is for solvent companies where shareholders wish to close the business voluntarily. The directors must swear a statutory declaration of solvency, confirming the company can pay all debts within 12 months. The liquidator then distributes surplus assets to shareholders and dissolves the company.
How long does the liquidation process take for a company in County Down?
The timeline varies depending on the complexity of the case. A simple MVL for a solvent company can often be completed within 6 to 9 months, including the dissolution period. A CVL typically takes longer, often 12 to 18 months, because the liquidator must investigate the company's affairs, deal with creditor claims, and possibly pursue legal actions. If the company has complex assets, ongoing litigation, or missing records, the process may extend further. Our liquidators provide a realistic timeline after reviewing your specific circumstances.
What are the legal duties of directors when their company is insolvent in Co Down?
Directors of an insolvent company in Northern Ireland must act in the best interests of creditors, not shareholders. They must avoid wrongful trading, which means continuing to trade while knowing the company cannot avoid insolvent liquidation. Directors should seek professional advice immediately, attend to statutory filings, and cooperate with the liquidator. Failure to comply can lead to personal liability for company debts, disqualification as a director, or even criminal penalties. Our liquidators provide guidance to help you meet these duties correctly.
Can a company in Co Down continue trading during liquidation?
In a CVL, the company generally ceases trading once the liquidation begins, except where the liquidator decides to continue trading temporarily to achieve a better return for creditors. In an MVL, trading must stop once the declaration of solvency is made, as the company is being wound up. If your company is insolvent but you wish to continue trading, alternatives such as a Company Voluntary Arrangement (CVA) or administration may be more appropriate. Our team can assess your cash flow and advise on the best course of action.
What are the costs of hiring a company liquidator in Co Down?
Liquidation costs vary based on the size and complexity of the company. For a CVL, the liquidator's fees are typically paid from the company's assets, but if assets are insufficient, creditors may agree to a fee structure or directors may need to contribute. For an MVL, fees are agreed with the directors and are often fixed or based on time spent. We provide clear, transparent fee quotes before you commit, with no hidden charges. Initial consultations are free, and we explain all costs upfront so you can make an informed decision.
What happens to employees when a company in Co Down goes into liquidation?
In a CVL, employees are automatically made redundant when the company enters liquidation. The liquidator becomes responsible for their employment contracts but will dismiss them shortly after appointment. Employees may be entitled to redundancy pay, unpaid wages, holiday pay, and notice pay. These claims are preferential and can be paid from the National Insurance Fund through the Redundancy Payments Service. The liquidator provides employees with the necessary forms (RP1, RP2) to claim statutory entitlements. In an MVL, employees are typically dismissed before the liquidation begins, and all outstanding wages must be settled by the directors.
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