The harsh reality of business is that not all companies survive, and if your limited company cannot pay what it owes, you may need to consider liquidation.
If your company has debt and can’t meet its outgoings, then it is insolvent. On the other hand, if there is no realistic prospect of saving it or improving the situation, liquidation may be the best course of action.
When you liquidate a company, your organisation’s assets are used to pay off its debts, with anything leftover going to shareholders. An Insolvency Practitioner oversees this process, and we work with you to achieve the most desirable resolution in this scenario.
There are three ways companies are liquidated:
If you decide your business cannot be saved (or simply do not want to save it) then we can guide you through the formal insolvency process known as a Creditors’ Voluntary Liquidation (CVL).
A Members’ Voluntary Liquidation (MVL) is a liquidation that applies to solvent companies – it is the formal process which brings your company to an orderly end. Using an MVL rather than a dissolution can give you a tax advantage, as funds from the business are treated as capital gains rather than income.
A company can be forced into liquidation because of money it owes to creditors or HMRC, known as compulsory liquidation. A winding up petition is served to you when creditors apply to the courts in this case. All is not lost though, and we can help if your business finds itself in this situation.
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For free, immediate and confidential advice about closing a company, please contact us.
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