It is the process used by liquidators to legally bring to the end a company at the request of shareholders/directors.
This action is usually taken because the business is insolvent in which case a Creditors’ Voluntary Liquidation (CVL) takes place involving a meeting of creditors or it could be, for instance, due to the owner deciding to close the business as he or she is retiring when it would be a Members’ Voluntary Liquidation (MVL).
A Liquidator, who is an authorized insolvency practitioner, is appointed who takes over the responsibility for winding down the company that will no longer carry on doing business or employing people. Following the appointment of the liquidator, the directors no longer play a part in the business but could be asked by the liquidator for some sort of help in connection with the winding-up.
The process will include the selling of any assets to reduce/clear the company’s indebtedness. Once this is concluded, the company will be dissolved, removed from the register at Companies House and it will exist no more.
The process for liquidating a small company is usually straightforward and takes a few months.
Liquidation allows the directors to move on to pastures new whether that is in the same sort of business or a completely different venture.
Under the Insolvency Act 1986, if a company is not in the financial position to meet its bills on their due date then it is in a position of cash flow insolvency. Alternatively, if the monetary amount of the company’s liabilities exceeds its assets then it is in a position of balance sheet insolvency.
In the main, it is problems with cash flow that result in the directors of a company considering their options including liquidation.
Do they raise further funds to inject into the company perhaps by using the equity in their matrimonial homes to obtain additional advances through their mortgage lenders or do they make the decision to go into liquidation? A difficult choice but, if it is the latter, we are here to help.
As signified by the word “Limited” in the company name, unless the directors and shareholders gave personal guarantees to the company’s creditors such as the bank, landlord or suppliers, they have no personal liability for any indebtedness the company has.
Do bear in mind that if a personal guarantee has been provided it does not form part of the liquidation procedure.
A potential risk to a director is when it is deemed that he or she has seriously mismanaged the company’s affairs. This could result in being disqualified as a director for a number of years.
The amount will vary and has to have the agreement of the creditors. Obviously, the more complex and time consuming a company liquidation is, as tends to be the case with larger companies, the more expensive.
If there are sufficient realizable assets owned by the company that are being liquidated, these could be used to pay the fee of the Liquidator. If not, the fee is payable to us in advance.
You will be pleased to hear that our pricing structure is extremely competitive.
In particular with bigger liquidation cases, it is a sensible idea to speak with a specialist. For instance, if you are considering buying some of the assets of the company or have given a personal guarantee, you may prefer to get in touch with us about your options so do not hesitate to contact us.
However, in the case of smaller companies with no assets to sort out, where you are happy that a simple liquidation is the most suitable route to go down then there is no reason why you cannot start the process online through us. We understand that it is often a difficult decision to go into liquidation but you can rest assured that you are in capable, caring hands so you can leave things to the experts. You can be confident that matters will be dealt with professionally, legally, efficiently and inexpensively.
You will probably look back in a few months time and be pleasantly surprised just how seamless the process has been.
Yes, it is. We are one of a limited number of businesses that offer an online insolvency service.
Just follow these steps: –
To find out if your company qualifies to go into liquidation just fill in our liquidation tool providing the likes of details of assets and liabilities or, if you prefer, contact us and we will then provide a quotation.
You can start the online liquidation process HERE.
In this respect, it is usual practice that meetings take place involving directors, shareholders, creditors and the nominated liquidator.
Initially, the directors start the process by holding a board meeting to resolve that the company goes into liquidation. This resolution to wind up the company and appoint a liquidator is then approved by the shareholders. At a creditors meeting, it is the creditors who confirm that the liquidator recommended by the shareholders should be appointed.
You tend to find, with small companies going into liquidation, that creditors do not usually attend with matters being dealt with by correspondence. The process is usually straightforward.
So, the same processes are followed whether you commence the liquidation in the traditional manner or online. However, by using our online service, you should find that it is simpler, quicker and less expensive.
If you need professional and impartial liquidation advice, get in touch today.
0121 769 2833
