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Frequently asked questions
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, meaning it cannot pay its debts as they fall due. It is initiated by the directors and involves a meeting of creditors. An MVL is used when a company is solvent but the directors wish to close it down, often for retirement or restructuring. In an MVL, a declaration of solvency is made, and creditors are paid in full before the company is dissolved.
How much does a company liquidation cost in Ipswich?
The cost of a CVL typically ranges from £4,000 to £8,000 plus VAT, depending on the complexity of the company's affairs. We offer fixed-fee packages with no hidden charges, and we can discuss payment options, including director-funded fees or using company assets. For an MVL, fees are often lower because the process is simpler, and we will provide a clear quote before you commit.
What are the legal duties of a director when a company becomes insolvent?
Directors have a legal duty to act in the best interests of creditors once insolvency is apparent. This includes avoiding wrongful trading, which means not incurring new debts when you know the company cannot repay them. You must also keep proper financial records and cooperate fully with the appointed liquidator. Failure to do so can lead to personal liability, disqualification, or even criminal prosecution.
Can I continue to trade if my company is in liquidation?
No. Once a company enters liquidation, the liquidator takes control of all assets and the trading authority of directors ceases. However, in certain circumstances, the liquidator may continue to trade for a short period to sell stock or complete contracts, but this is done under their supervision. If you wish to continue trading, you may need to consider a company voluntary arrangement (CVA) or administration instead.
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 acted fraudulently or wrongfully. However, if you have given personal guarantees for loans or leases, the lender can pursue you for those amounts. Our team will review your personal guarantees and advise you on the potential risks before you proceed.
How long does the liquidation process take in Ipswich?
The initial liquidation meeting can be held within 7-10 days of your decision to proceed. After the liquidator is appointed, the process of realising assets, investigating affairs, and distributing funds typically takes 6 to 12 months. The final dissolution of the company usually occurs after a further 3 months, once the liquidator's final report is filed with Companies House.
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