Liquidations

Liquidations

Talk to Portland and find out about Liquidation from Insolvency experts

Liquidation of a company is the process where a limited company is wound up by a specialist Insolvency Practitioner. The company’s assets are then liquidated and redistributed in order of priority, with final dissolution being when they are struck off the register of companies. Liquidation should be considered a last resort. However, if it is required then it can be a useful exit tool.

Before going down this route, it should be considered that as soon as a ‘Liquidator’ is appointed they are responsible for investigating the actions of 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.

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Choose Portland to guide you through 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 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 Liquidation explained

There are two forms of liquidation, voluntary and compulsory. A voluntary procedure can be either a Creditor’s Voluntary Liquidation (CVL) or a Member Voluntary Liquidation (MVL), which is initiated by shareholders and directors.

Voluntary Liquidations

A Creditors’ Voluntary Liquidation 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.

A Members’ Voluntary Liquidation 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 and 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 be investigated to 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 to viable companies in financial difficulty, such as 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 an organisation, as well as optimising the return for creditors. By reducing the likelihood that guarantees are called upon and ensuring the prompt payment of dividends we ensure insolvency costs do not erode creditors share.

If you are thinking of liquidating your company or have received a winding up order, then contact one of our trusted advisors first 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

Why talk to Portland?

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We help over 85% businesses we work with avoid insolvency and continue to be successful

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From insolvency to cashflow solutions – we provide a way forward with positive outcomes

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We’ve restored confidence in businesses and their owners for over 30 years, from start ups to large global companies