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)?
A Creditors Voluntary Liquidation (CVL) is used when a company is insolvent, meaning it cannot pay its debts as they fall due. The directors initiate the process, and a licensed insolvency practitioner is appointed to wind up the company, sell assets, and distribute funds to creditors. A Members Voluntary Liquidation (MVL) is for solvent companies where shareholders decide to close the business voluntarily. In an MVL, 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, often with tax advantages.
How much does company liquidation cost in Isle of Lewis?
The cost of liquidation in Isle of Lewis varies based on the complexity of the case, the size of the company, and the number of creditors. For a straightforward Creditors Voluntary Liquidation (CVL), fees typically range from £3,000 to £6,000 plus VAT, but this can be higher if there are complex asset realisations or legal issues. Members Voluntary Liquidation (MVL) fees are often lower, starting around £2,500. Our Isle of Lewis liquidators provide a fixed-fee quote after an initial free consultation, so you know the costs upfront with no hidden charges.
Can I keep trading after appointing a liquidator?
Once a liquidator is appointed, they take control of the company's affairs. The directors' powers cease, except for assisting the liquidator. In a Creditors Voluntary Liquidation, trading typically stops immediately, unless the liquidator decides to continue trading temporarily to sell stock or complete contracts for the benefit of creditors. In a Members Voluntary Liquidation, the company can continue trading until the liquidator is appointed, but after that, the liquidator manages the winding-up process. If you wish to trade after liquidation, you would need to start a new company, subject to restrictions on using the same or similar name.
What are the legal duties of directors when a company is insolvent in Isle of Lewis?
Directors of an insolvent company in Isle of Lewis have a legal duty to act in the interests of creditors, not just shareholders. This means they must avoid wrongful trading, which occurs when they continue to trade while knowing the company cannot avoid insolvent liquidation. Directors must also not prefer one creditor over others, and they must disclose all relevant information to the liquidator. Failure to comply can result in personal liability for company debts, disqualification as a director, or even criminal prosecution. Our liquidators provide urgent advice to help directors fulfil these duties and protect their position.
How long does the liquidation process take in the Isle of Lewis?
The duration of liquidation in Isle of Lewis depends on the type and complexity. A Creditors Voluntary Liquidation (CVL) typically takes between 6 and 12 months to complete, but it can be longer if there are disputes, asset recovery issues, or investigations. A Members Voluntary Liquidation (MVL) is often quicker, usually completing within 3 to 6 months. The process includes calling creditors' meetings, realising assets, agreeing claims, and finally applying to Companies House for dissolution. Our local liquidators work efficiently to close your company as quickly as possible while ensuring full legal compliance.
Will I be personally liable for company debts after liquidation?
In most cases, no. A company is a separate legal entity, and its debts are not the personal responsibility of directors, provided they have acted properly. However, personal liability can arise if you have given personal guarantees for business loans or leases, or if you have been involved in wrongful trading, fraudulent trading, or misfeasance. The liquidator has a duty to investigate director conduct and can pursue claims against you personally if there is evidence of misconduct. Our Isle of Lewis liquidators will review your situation and advise you on any potential risks before you proceed.
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