There is a solution, it is called creditors voluntary liquidation.
What does liquidation mean and how does it work? How to people go about winding up a company?
Read on and we'll help you answer those questions.
What is liquidation? Many people ask us this and it's really a straight forward answer: creditors voluntary liquidation or compulsory liquidation means the end of the company and its assets are then "liquidated" or turned into cash for the creditors if any assets are available.
It is quick, relatively painless for you and CVL brings an end to worry, if you have acted properly, and it will allow you to get on with your life.
Creditors voluntary liquidation is the most common form of liquidation in use in the UK. There will be around 8-20,000 voluntary liquidations each year in the UK depending upon the economic climate. It will be more in this recession, so you are not alone!
Usually the company has run out of cash, it cannot pay its debts on time and the directors are concerned that the business is simply not viable.
They are also very worried about Wrongful Trading. (See guide on separate website).
They choose to stop trading and close the business. they contact KSA or other advisors and we arrange for one of our licensed insolvency practitioners or one of his managers to call and arrange a free meeting.
If the directors decide to call it a day, they ask the insolvency practitioner (IP) to call a meeting of creditors, then he is appointed as liquidator by the creditors at a creditors meeting. The IP will deal with the remains of the business. Directors get on with their lives and often that's the end of that. Sometimes a phoenix is proposed.
What is a "Phoenix"?
You can liquidate a company and start the same business again, but only under strict rules and conditions. This is a potential legal "minefield" and you need to take proper advice. DO NOT USE the same name or similar name as this can be a criminal offence. Call us if you want more details.
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What if the company can be viable?
But, before you decide on liquidation as the correct option, you should also consider whether your company can be viable if radically restructured and, if so, how can you get help. If there is a viable business in there but you are tired and distressed we can still help. Many people call us saying liquidate my company please! Then once we take away the pressure and look harder at the business problems we can often see a solution. This could be a company voluntary arrangement.
Because KSA CompanyRescue is on the outside looking in we can often see possibilities that you cannot. We are also experts at using the law to restructure companies so call us and discuss liquidation versus the GO options. Our advice is always this: consider all other options like CVA first before deciding to liquidate!
Clearly, if the company has decided to liquidate, we can help you with the process quickly and with understanding. One of our national team of insolvency practitioners can start the CVL process as quickly as today for you if that’s the right decision. Someone said I cannot be a director of another company if we go into liquidation?
Sorry, that's complete nonsense! Providing you have not been made bankrupt or disqualified, you can be a director of as many companies as you like.
Want more detailed guides to liquidation? Visit our main companyrescue.co.uk website detailed guide page here: http://www.companyrescue.co.uk/company-rescue/options/detailed_cvl.aspx
Want to speak to a friendly trained advisor? Contact KSA CompanyRescue Birmingham on 0121 3780671, or on 0800 9700539 now.