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 CVL and an MVL in Lincolnshire?
A Creditors Voluntary Liquidation (CVL) is used when a company is insolvent and cannot pay its debts. It is initiated by directors and involves a licensed insolvency practitioner who sells assets and distributes proceeds to creditors. A Members Voluntary Liquidation (MVL) is for solvent companies where directors wish to close the business and extract retained profits as capital gains. In an MVL, directors must swear a statutory declaration of solvency, and the process is typically more straightforward and less costly than a CVL.
How much does a company liquidation cost in Lincolnshire?
The cost of liquidation in Lincolnshire varies depending on the complexity of the case, the number of creditors, and the size of the company. For a straightforward CVL, fees typically range from £3,000 to £6,000 plus VAT, and are paid from the company's assets. For an MVL, fees are often fixed around £2,500 to £4,000. We provide a transparent fixed-fee quote after an initial free consultation, with no hidden charges. In some cases, if assets are insufficient, creditors may cover fees, but directors should always seek professional advice.
Can a company trade after liquidation has started?
Once a company enters liquidation, the appointed liquidator takes control of the company's affairs, and the directors' powers cease. Trading is generally not permitted after the liquidation order is made, except in very limited circumstances where the liquidator continues trading to sell stock or complete contracts for the benefit of creditors. If directors continue trading while insolvent before liquidation, they risk personal liability for wrongful trading, so it is essential to seek advice at the earliest sign of financial difficulty.
What are the legal duties of directors during insolvency in Lincolnshire?
Directors have a legal duty to act in the best interests of creditors once a company becomes insolvent. This includes avoiding preferential payments to certain creditors, not taking excessive director loans, and not continuing to trade if there is no reasonable prospect of avoiding liquidation. Directors must also cooperate with the liquidator, provide all necessary books and records, and attend interviews if required. Failure to comply can result in personal liability, disqualification, or even criminal prosecution. Seeking professional advice early helps mitigate these risks.
How long does the liquidation process take in Lincolnshire?
The duration of a liquidation depends on the case complexity. A CVL typically takes between 6 and 12 months to complete, including asset realisation, creditor claims, and final distribution. An MVL can be completed in as little as 3 to 6 months if the company has straightforward assets. However, if there are complex investigations, legal disputes, or unclaimed assets, the process may extend. Your liquidator will provide a realistic timeline during the initial consultation and keep you updated throughout.
Will I be personally liable for company debts after liquidation?
In most cases, directors are not personally liable for company debts if the company is liquidated properly and they have not acted wrongfully. However, personal liability can arise if you have given personal guarantees to lenders or suppliers, or if you have engaged in fraudulent or wrongful trading, misused company funds, or continued trading while insolvent without taking professional advice. A licensed liquidator can assess your situation and help you understand your exposure. If personal guarantees exist, you may need to negotiate with creditors separately.
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