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 compulsory liquidation?
A Creditors' Voluntary Liquidation (CVL) is a voluntary process initiated by the company's directors and shareholders when the company is insolvent. The directors pass a resolution to wind up the company, and a licensed insolvency practitioner is appointed as liquidator. In contrast, compulsory liquidation is a court-ordered process, typically initiated by a creditor who petitions the court to wind up the company. In a compulsory liquidation, the court appoints an official receiver or a licensed insolvency practitioner to act as liquidator.
How much does it cost to appoint a company liquidator in Hendon London?
The cost of liquidation varies depending on the complexity of the company's affairs, the number of assets, and the level of creditor involvement. For a Creditors' Voluntary Liquidation, fees are often taken from the company's assets, but if there are insufficient assets, directors may need to fund the process personally. We always provide a transparent, fixed-fee quote before you commit. Our initial consultation is completely free and without obligation, so you can understand all costs upfront.
Can I continue to trade my company while it is being liquidated?
No. Once a company enters liquidation, the appointed liquidator takes control of the company's affairs, and trading must cease immediately, except for actions required to preserve asset value or complete essential contracts. Continuing to trade after the liquidation date without the liquidator's permission could result in personal liability for directors. If you wish to keep trading, we can discuss alternative options like administration or a company voluntary arrangement (CVA) before deciding on liquidation.
What are the legal duties of a director during the liquidation process?
Directors have a legal duty to cooperate fully with the liquidator. This includes providing all company records, financial statements, and information about assets and liabilities. Directors must also explain any transactions that occurred in the period leading up to liquidation, particularly those that may be considered wrongful trading or preferences. Failure to cooperate can result in personal liability, disqualification as a director, or even criminal prosecution. Our team will guide you through your obligations to ensure compliance.
Will I be personally liable for company debts after liquidation?
In most cases, no. The primary benefit of a Creditors' Voluntary Liquidation is that it provides a legal shield against personal liability for company debts, provided you have not acted wrongfully. However, if you have given personal guarantees for business loans or leases, creditors can pursue you personally for those amounts. Additionally, if you have traded while insolvent and failed to take reasonable steps to minimise losses to creditors, you could be held personally liable for wrongful trading. We will assess your situation to identify any potential risks.
How long does the company liquidation process take in Hendon London?
The length of the liquidation process depends on the complexity of the company's financial affairs. A straightforward Creditors' Voluntary Liquidation can be completed in as little as 6 to 9 months, but the final distribution to creditors and the dissolution of the company may take longer if there are complex asset sales or disputes. Compulsory liquidations can take longer due to court procedures. We will provide a realistic timeline during your initial consultation based on your specific circumstances.
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