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 Creditors' Voluntary Liquidation (CVL) is used for an insolvent company, where directors cannot pay debts as they fall due. It involves a meeting of creditors and aims to realise assets to repay them. A Members' Voluntary Liquidation (MVL) is for a solvent company, where shareholders decide to wind up voluntarily, often for tax efficiency or because the business has achieved its purpose. In an MVL, a declaration of solvency is made, and creditors are paid in full before any distribution to shareholders.
How long does the company liquidation process take in West Sussex?
The duration varies depending on the type of liquidation and the complexity of the company's affairs. A Creditors' Voluntary Liquidation (CVL) typically takes between 6 to 12 months to complete, including the final meeting and dissolution. A Members' Voluntary Liquidation (MVL) can be quicker, often 3 to 6 months, if all assets are realised and debts settled promptly. However, if there are complex asset sales, legal disputes, or missing records, the process may take longer. Our team provides a clear timeline at the outset.
What are the legal duties of directors during a company liquidation?
Directors have several legal duties during liquidation. They must cooperate fully with the appointed liquidator, providing all company books, records, and accounts. They must not dispose of any company assets without permission. They must also disclose any transactions that may be considered wrongful trading, preferences, or transactions at undervalue. Directors must also submit a statement of affairs detailing the company's financial position. Failure to comply can lead to personal liability, disqualification, or even criminal prosecution.
Can a company liquidation be stopped once it has started?
Once a liquidation process has formally begun, it is very difficult to stop. In a Creditors' Voluntary Liquidation, the creditors' meeting approves the winding-up, and the liquidator is appointed. To halt it, you would need a court order, which is rare and typically only granted if there is a serious procedural error or fraud. In a compulsory liquidation (court-ordered), a petition can be dismissed if the debt is paid or a valid dispute exists, but once a winding-up order is made, it cannot be reversed. Early professional advice is essential to explore alternatives like administration or a company voluntary arrangement (CVA) before liquidation.
What happens to employees when a company goes into liquidation?
When a company enters liquidation, employees are automatically dismissed from the date the winding-up order is made or the resolution is passed. The liquidator then becomes responsible for handling employee claims, including unpaid wages, holiday pay, and redundancy pay. Employees may be able to claim certain statutory payments from the National Insurance Fund (via the Redundancy Payments Service) if the company cannot pay. The liquidator will provide the necessary forms and guidance. In some cases, the liquidator may retain staff to assist with asset realisation or ongoing operations temporarily.
How much does it cost to appoint a company liquidator in West Sussex?
The cost of liquidation depends on the complexity of the case, the size of the company, and the type of liquidation. For a Creditors' Voluntary Liquidation (CVL), fees are often based on a fixed fee or a percentage of asset realisations, typically ranging from £4,000 to £10,000 plus VAT, but this varies. For a Members' Voluntary Liquidation (MVL), fees are usually lower, starting around £2,500. It is important to obtain a clear written quote before appointing a liquidator. We offer transparent, fixed-fee options for straightforward cases, and we always discuss costs upfront during the free initial consultation.
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