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 are the different types of company liquidation in Guernsey?
In Guernsey, there are primarily two types of liquidation: members' voluntary liquidation (MVL) for solvent companies where directors make a declaration of solvency, and creditors' voluntary liquidation (CVL) for insolvent companies. There is also compulsory liquidation, which is ordered by the Royal Court, often following a creditor's petition. Each type follows distinct procedures under Guernsey law, and a licensed liquidator must be appointed to oversee the process.
When should a company in Guernsey consider liquidation?
A company should consider liquidation when it has fulfilled its purpose, when shareholders decide to wind up a solvent business, or when the company is insolvent and cannot pay its debts as they fall due. Other triggers include a deadlock in management, significant losses, or a court order. Early consultation with a liquidator is advisable to explore options like restructuring or formal winding-up to protect stakeholder interests.
What is the role of a liquidator in Guernsey?
A liquidator in Guernsey is a licensed insolvency practitioner who takes control of the company's assets, investigates its affairs, and realizes assets to pay creditors. They also verify claims, distribute any surplus to shareholders, and ensure the company is formally dissolved. The liquidator acts in the best interests of all stakeholders, with duties to report to the court or creditors as required by law.
How long does a company liquidation take in Guernsey?
The duration varies depending on the complexity and type of liquidation. A simple members' voluntary liquidation for a solvent company can be completed in several months, often around 6 to 12 months, once all assets are realized and liabilities settled. A creditors' voluntary liquidation or a compulsory liquidation may take longer, especially if there are disputes, complex asset recoveries, or ongoing investigations.
Can a Guernsey company continue trading during liquidation?
Once a winding-up order is made or a resolution to wind up is passed, the company generally ceases trading, except as necessary for the beneficial winding-up. The liquidator may continue operations temporarily to sell assets as a going concern or to complete contracts, but this is done under strict fiduciary duties. Any trading must be approved by creditors or the court, and the liquidator must prioritize maximizing returns for creditors.
What are the costs associated with hiring a company liquidator in Guernsey?
Liquidator fees in Guernsey are typically based on time spent at agreed hourly rates or as a fixed fee, depending on the complexity. Costs include the liquidator's remuneration, legal and professional fees, and disbursements. For insolvent companies, fees are paid from the company's assets, ranking as an expense of the liquidation. It is advisable to obtain a clear fee structure upfront, and creditors may approve the fees at meetings.
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