Company Liquidation

Liquidations

Talk to Portland and find out about Company Liquidation from Insolvency experts

Liquidation of a company is the process where a limited company is wound up and brought to an end by a specialist Insolvency Practitioner. Your company’s assets are liquidated and later redistributed to creditors in order of priority. Final dissolution comes when your business is struck off the register of companies. As specialist Insolvency Practitioners, we believe Company Liquidation should only be considered a last resort. However, if it is required then it can be a useful exit tool.

But before going down the liquidation route, you need to consider your director’s responsibilities. As soon as you have appointed a ‘Liquidator’ they are responsible for investigating the actions of your directors. Should the directors not have acted in the best interests of creditors when they first became aware of insolvency, then they could be found guilty of wrongful or fraudulent trading. Being found guilty of wrongful or fradulent trading has severe impact on both the director’s personal and professional lives moving forward.

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Choose Portland to guide you through Company Liquidation, and find out more about what it means for you:

  • Company assets are assessed and liquidated to pay creditors
  • Surplus cash is distributed to shareholders
  • In final dissolution the company is struck off the register of companies
  • During company liquidation the actions of directors are investigated
  • A solvent or insolvent company can be liquidated
  • Solvent liquidations are a useful exit strategy or if the business has outgrown usefulness.

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Different forms of Company Liquidation explained

There are two forms of company liquidation, voluntary and compulsory. A voluntary procedure is either a Creditors’ Voluntary Liquidation (CVL) or a Members’ Voluntary Liquidation (MVL), which is initiated by shareholders and directors.

Voluntary Liquidations

CVL

A Creditors’ Voluntary Liquidation (CVL) is suitable for insolvent companies and involves the dissolution and redistribution of assets to the creditors. It allows directors to write off unsecured debt which is not personally guaranteed.

MVL

A Members’ Voluntary Liquidation (MVL) is used to liquidate solvent companies as part of an exit strategy. The directors must sign a declaration to confirm there are no remaining creditors before doing so. As a result, they can then extract cash and assets from the company in a tax efficient way.

Compulsory Liquidations

A Compulsory Liquidation is initiated by an unpaid creditor issuing a winding up order and seeking to force the company closure. If you act quickly and seek an Insolvency Practitioner’s advice there are solutions which can avoid the forceable closure of your business.

The alternatives to Liquidation

If you are not seeking to liquidate your company there are suitable alternatives available if yur company is viable but in financial difficulty. Such alternatives include a Company Voluntary Arrangement or Company Administration.

Our approach to company liquidation

Our approach to liquidations means that we offer close support to the directors of your organisation, whilst also optimising return for creditors. We ensure insolvency costs do not erode creditors share. We reduce the likelihood that guarantees are called upon and ensure the prompt payment of dividends.

If you are thinking of liquidating your company or have received a winding up order, then contact one of our trusted advisors to ensure it is the best route available.

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Talk to industry leading business recovery experts trusted by UK business for over 30 years. Call us now on 01489 550 440

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