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 Creditor Voluntary Liquidation and a Compulsory Liquidation in South Glamorgan?
A Creditor Voluntary Liquidation (CVL) is initiated by the company's directors and shareholders when they determine the business is insolvent, leading to a voluntary appointment of a liquidator. A Compulsory Liquidation is a court-ordered winding up, usually initiated by a creditor who files a winding-up petition against the company, often through the Cardiff County Court. In a CVL, the directors control the timing and choice of liquidator, whereas in a compulsory liquidation, the Official Receiver initially takes control before a liquidator is appointed.
Can a director be held personally liable for company debts during liquidation in South Glamorgan?
Yes, but only under specific circumstances. A liquidator can pursue directors for wrongful trading if they continued to trade while knowing the company had no reasonable prospect of avoiding insolvency. Personal liability can also arise for fraudulent trading, misfeasance, or repayment of illegal dividends. Furthermore, if directors have given personal guarantees on company loans or overdrafts, they will be personally liable to those creditors regardless of the liquidation process. Our advice helps directors avoid these pitfalls.
What happens to company employees when a liquidator is appointed in South Glamorgan?
When a company enters liquidation, all employees are automatically dismissed from the date of the liquidation order or the resolution to wind up. The liquidator will calculate statutory redundancy pay, unpaid wages, holiday pay, and notice pay. Employees can claim these amounts from the National Insurance Fund via the Redundancy Payments Service. The liquidator provides each employee with form RP1 and a statement of their claim. Preferential creditors, including employees for certain unpaid wages, are paid before unsecured creditors from the company's assets.
How long does the liquidation process take for a company based in South Glamorgan?
The duration varies depending on the complexity of the company's affairs. A straightforward Creditor Voluntary Liquidation with minimal assets and no litigation can be concluded within 6 to 9 months. However, if the liquidator needs to investigate complex transactions, recover assets from third parties, or pursue legal claims against directors, the process can extend to several years. The liquidator is required to file a final report with Companies House and hold a final meeting of creditors upon completion.
What are the costs involved in appointing a liquidator for a South Glamorgan company?
The liquidator's fees are paid from the company's assets, not directly from the directors' personal funds. The fees are set based on the complexity of the case and are typically calculated on a time basis or as a percentage of asset realisations. If the company has no assets, the directors may need to fund the liquidation to cover statutory costs, or the creditors may choose not to proceed. Our initial consultation is free, and we provide a fixed-fee quotation for the liquidation before any formal appointment.
Can we continue trading after a liquidator is appointed in South Glamorgan?
No, once a liquidator is formally appointed, the directors' powers cease immediately. The liquidator takes full control of the company's assets and affairs. The only trading that may continue is carried out by the liquidator for the purpose of realising assets at a better value or completing work-in-progress contracts. Directors who continue to trade or deal with company assets after the appointment risk personal liability for any debts incurred during that period, which may be deemed fraudulent trading.
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