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 solvent and insolvent liquidation in Tyne & Wear?
A solvent liquidation, known as a Members' Voluntary Liquidation (MVL), is used when a company is able to pay its debts in full within a set period, typically used for closing a healthy business or extracting retained profits tax-efficiently. An insolvent liquidation, known as a Creditors' Voluntary Liquidation (CVL), is used when a company cannot pay its debts, and it involves a formal process where a licensed insolvency practitioner realises assets to distribute to creditors in a legally prescribed order.
How much does it cost to appoint a company liquidator in Tyne & Wear?
The cost of liquidation varies depending on the complexity of the company's affairs, the number of assets, and the level of creditor involvement. For a straightforward Creditors' Voluntary Liquidation, fees typically range from £3,000 to £6,000 plus VAT and disbursements, but we always provide a fixed-fee quote upfront with no hidden charges. Members' Voluntary Liquidations may cost less if the company is simple, but we will assess your situation and give you a transparent quote before any work begins.
Can I continue trading while my company is being liquidated?
Once a liquidation order is made, directors lose control of the company, and trading must cease immediately except for actions that preserve asset value or are specifically authorised by the liquidator. However, before liquidation begins, you may continue trading if you are taking professional advice and not incurring further debts that the company cannot repay, as this could lead to wrongful trading claims against directors.
What are the legal duties of directors during a company liquidation in Tyne & Wear?
Directors have a duty to cooperate fully with the liquidator, providing all company records, accounts, and information as requested. They must also disclose any transactions made within the last two years that could be considered preferences or transactions at an undervalue. Directors are personally liable for any wrongful trading if they continue to trade while knowing the company is insolvent, and they must not hide assets or mislead creditors.
How long does a company liquidation take to complete in Tyne & Wear?
The length of a liquidation depends on the complexity of the case. A simple Creditors' Voluntary Liquidation can be completed in as little as six to nine months, but if there are complex asset sales, legal disputes, or incomplete records, it may take over a year. Members' Voluntary Liquidations are often quicker, sometimes concluding within three to six months, assuming all assets are realised and debts are settled promptly.
What happens to employees when a company is liquidated in Tyne & Wear?
When a company enters liquidation, all employees are automatically dismissed from the date the liquidation order is made. Employees may be entitled to claim redundancy pay, unpaid wages, holiday pay, and notice pay from the National Insurance Fund, but they must submit claims to the Redundancy Payments Service. The liquidator will provide employees with the necessary forms and guidance, and preferential creditors such as employees are paid before unsecured creditors from available assets.
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