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 CVL is used when a company is insolvent and cannot pay its debts. It is initiated by directors but controlled by creditors, and it typically results in the company being wound up and assets distributed to creditors. An MVL is for solvent companies where directors and shareholders decide to close voluntarily, usually for retirement or restructuring. In an MVL, a licensed insolvency practitioner declares solvency, and assets are distributed to shareholders after all debts are paid.
How long does the liquidation process take in North Parade?
The duration varies depending on the complexity of the company's affairs. A simple MVL can often be completed in 6 to 12 months, including the final distribution to shareholders. A CVL may take longer, typically 12 to 18 months, due to the need to realize assets, investigate transactions, and handle creditor claims. Our team works efficiently to expedite the process while ensuring full legal compliance.
What are the legal obligations of directors during a company liquidation?
Directors must cooperate fully with the liquidator, providing all company records, financial statements, and explanations of transactions. They must not dispose of any assets or favor certain creditors. Directors also have a duty to avoid wrongful trading; if they continue trading while insolvent, they may become personally liable for debts incurred. Our liquidators help directors understand and fulfill these obligations to minimize personal risk.
Can a company continue trading after appointing a liquidator?
Once a liquidator is appointed, the liquidator takes control of the company's affairs. The company ceases normal trading immediately, except for limited activities that the liquidator may authorize to preserve asset value or complete contracts. Directors lose their powers, and any trading without the liquidator's consent could be deemed unlawful. In some cases, a pre-pack administration may allow a going-concern sale, but this is a different process.
What costs are involved in hiring a company liquidator in North Parade?
Liquidation costs depend on the size and complexity of the company, the amount of work required, and the type of liquidation. Fees are typically paid from the company's assets, but if assets are insufficient, creditors or directors may need to fund the process. We provide transparent, fixed-fee quotes upfront, with no hidden charges. Our initial consultation is free, and we will outline all potential costs before you commit.
What happens to employees when a company is liquidated?
Employees are automatically dismissed upon the liquidation date. The liquidator is responsible for settling employee claims, including unpaid wages, holiday pay, and redundancy entitlements, but these are often paid from the National Insurance Fund (via the Redundancy Payments Service) if the company has no assets. The liquidator will provide employees with the necessary forms and guidance to claim their statutory rights.
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