A CVL is the most common form of liquidation in use in England and Wales and formally brings to an end the operations of a company.
If your company's debts have become unmanageable, you face increasing creditor pressure and you ultimately know the business cannot continue to trade, then this is an option available to your company.
As a director, you have a responsibility to seek professional advice if you believe your company may not be able to avoid insolvency. Getting advice early, protects the creditors interests and limits your risk of exposure, to any potential wrongful trading actions.
We can advise on the different liquidation routes available but once a company is in liquidation, the Insolvency Practitioner has a duty to realise all assets, distribute the proceeds to the company's creditors and investigate the company's affairs and the directors' conduct.
The liquidation remains open until all matters above have been concluded.
Points to Note:
- A quick and potentially cost effective way of formally closing down a company.
- Ensures you are complying with your fiduciary duties as a director.
- Ends mounting pressure from creditors.
- Allows you to negotiate with creditors regarding personal guarantees.
- May minimise directors' exposure with regards to wrongful trading actions.
- There is the option of buying back the company’s assets at market value allowing future trade through a new entity.
- Allows employees to reclaim monies owed to them by the company (including redundancy) from the Redundancy Payments Service, subject to limitations.
- Conduct of the directors and company transactions prior to insolvency are reviewed.