Directors have a legal duty to ensure that their company is not trading whilst insolvent. But what does “trading insolvent” really mean, and how can […]
Category: Insolvent Liquidation
If a company is insolvent and needs to be closed then typically the directors and shareholders will decide to take the company into a creditors voluntary liquidation (CVL). Otherwise known simply as “voluntary liquidation” this is where a licenced insolvency practitioner will be appointed as Liquidator (following resolutions passed firstly by shareholders and then by creditors) over the company.
We’re often asked about the difference between Liquidation and Administration and when one should be used over the other. Here we cover the main differences between the two formal insolvency procedures,
How are funds distributed in a Liquidation and who is at the top of the pecking order? In this month’s article we discuss the strict hierarchy within the Insolvency Act, which determines the order that creditors will be paid during liquidation.
When it comes to a company entering into liquidation there are some important differences between the compulsory and voluntary routes, not least for the directors of the company.
Directors have a legal duty to ensure that their company is not trading whilst insolvent. But what does “trading whilst insolvent” really mean and how can it correctly be identified? This article provides an overview of the insolvency tests that can be applied to help company directors make an appropriate assessment of the situation.
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Thomas Grummitt and Andrew Smith are licensed to act as Insolvency Practitioners in the UK by the Insolvency Practitioners Association. In carrying out all work related to an insolvency appointment, insolvency practitioners are bound by the insolvency code of ethics and are subject to the regulations and guidance of their authorising body. Details of the code of ethics, statements of insolvency practice and other regulations and guidance issued by the Insolvency Practitioners Association can be found here: