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 an insolvent liquidation?
A solvent liquidation, also known as a Members' Voluntary Liquidation (MVL), is used when a company can pay all its debts in full within 12 months. It is often used for tax-efficient distribution of assets. An insolvent liquidation, such as a Creditors' Voluntary Liquidation (CVL), is for companies that cannot pay their debts. In a CVL, a licensed insolvency practitioner takes control to realise assets and distribute funds to creditors, and the company is then dissolved.
How long does a company liquidation process take on Victoria Street?
The duration varies depending on the complexity of the company's affairs. A straightforward solvent liquidation (MVL) can often be completed within 6 to 12 months, including the final dissolution. An insolvent liquidation (CVL) typically takes between 6 and 18 months, but this can extend if there are complex asset sales, legal disputes, or investigations into director conduct. Your liquidator will provide a realistic timeline after an initial review.
What are the legal duties of directors during an insolvent liquidation?
Directors have a duty to act in the best interests of creditors once insolvency is apparent. This includes avoiding wrongful trading, not preferring certain creditors over others, and providing full and accurate information to the liquidator. Failure to comply can lead to personal liability for company debts, disqualification as a director, or even criminal prosecution. Our team guides you through every step to ensure compliance.
Can I keep trading while my company is being liquidated?
Once a formal liquidation process begins, the liquidator takes control of the company's assets and affairs. Directors cannot continue trading in the normal sense. However, in certain circumstances, such as during an administration or a pre-pack sale, the existing management may continue under the supervision of the insolvency practitioner. Your liquidator will advise you on what is permissible in your specific case.
What are the costs of hiring a company liquidator on Victoria Street?
Costs vary based on the size and complexity of the company. For a Creditors' Voluntary Liquidation, fees are often based on a fixed fee or a percentage of realisations, and they are paid from company assets before distributions to creditors. For a Members' Voluntary Liquidation, fees are typically agreed upfront and paid by the company. We provide clear, written quotes with no hidden charges, and our initial consultation is always free.
Will I be personally liable for company debts after liquidation?
In most cases, no. Limited liability protects directors from personal responsibility for company debts, provided they have acted lawfully and not given personal guarantees. However, if you have given personal guarantees for loans or leases, creditors can pursue you for those amounts. Additionally, if you are found guilty of wrongful trading, fraudulent trading, or breach of fiduciary duty, you could be held personally liable. Our experts help you avoid these pitfalls.
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