Creditors Voluntary Liquidation

Liquidation should be considered to be a last resort where all other avenues to rescue the business have failed. It provides management with the peace of mind that the affairs of the business are being properly dealt with and reduces the possibility of accusations relating to wrongful trading (trading whilst insolvent is an offence that could result in personal liability for management).

Once a company commences Liquidation the business is usually closed and the employees laid off. A meeting of shareholders and creditors (known as a Section 98 meeting) is then held to place the company into liquidation.

Once in liquidation the Liquidator (who must be a Licensed Insolvency Practitioner (IP) takes control of the business and its assets. The IP would then sell the assets, collect any debts owed to the business and deal with any other matters such as leases.

Our service

Once it has been established that Liquidation is the best option we will assist in placing the business into liquidation and ensure that the statutory process is properly conducted. Once instructed creditors will be informed and we will liaise directly with them to reduce the stress upon management.

We will then work with management to prepare the necessary report and Statement of Affairs that must be presented at the creditors meeting.

The meeting of creditors must be chaired by a director of the company but we will usually conduct the meeting upon their behalf and deal with the statutory aspects of it. We will also brief the directors prior to the meeting as to what they should expect to enable them to prepare in advance for potential questions and queries.

Once in liquidation we aim to deal with the affairs quickly and efficiently. This ensures that the liquidation does not drag on for years and that creditors receive any dividend quickly. Most stakeholders will be given access through our website to the current status and estimated timescales to distributions and closure.

Fees

We do not charge for our initial advice and, unlike some of our competitors, any fees that we intend to charge are transparent and agreed in advance.

Once it has been established that liquidation is appropriate there will be a charge for assisting in placing the company into liquidation and for conducting the liquidation. These costs are normally paid out of the company's assets following their disposal during the liquidation - therefore normally there is no personal cost to the directors of the business. On occasions, if there are few or questionable company assets, a limited guarantee may be required from the directors. If this is necessary we will discuss this in advance so that it can be factored into the director's decision making process.

More information

If you are considering whether liquidation is appropriate please contact us fcontact us via our webform or call us on 0870 495 7854.

Continuing in business

There are specific rules covering the use of the business's name after it has gone into Liquidation. These rules limit who can use the name and what process must be undertaken.

Directors of businesses placed into liquidation should seek advice if they are considering re-starting the business to ensure they comply with the rules. Failure to comply could result in personal liability for the debts of the new business.

Timescales

We can act as quickly as required and the business can be placed into liquidation almost immediately (subject to shareholder approval). However a minimum of 14 days notice must be given to creditors for their approval of the choice of liquidator and in this intervening period the liquidator has limited powers.

Often it is preferable to close the business and place the business into liquidation on the same day as the creditor's meeting so there is often a hiatus period.

We will help you through the whole process from closure of the business, support and information to employees and securing the assets of the business to briefing on the process and questions likely to be asked at the creditor's meeting.