If you are thinking about closing down your company it is sometimes difficult to understand how to go about doing it. The correct process is likely to be determined upon whether the company is solvent (i.e. able to pay all its debts) or not.
If your company is unable to pay its debts as and when they fall due, it is deemed to be insolvent. In such circumstances you may want to close your company and start afresh, or simply walk away. If so, a Creditors Voluntary Liquidation (CVL) could be the ideal solution for you.
This occurs when a company is wound up by an order of the court following a creditor issuing a Winding up Petition against your company. The purpose is to ensure the company immediately stops trading and for the official receiver to appoint a liquidator.
If you wish to close your company please contact us today and we will be able to guide you towards the correct procedure to fit your circumstances.
✓ Low Cost Liquidation for Companies in debt
✓ Stop Pressure from HMRC and Creditors
✓ Nationwide service and experienced staff
Compulsory liquidation occurs when a company is wound up by an order of the court following a creditor issuing a winding up petition against your company.
The purpose of the order is ensure the company immediately stops trading and for the official receiver to appoint a liquidator who will have a duty to collect the company’s assets and distribute them to its creditors in accordance with the law.
If you are being faced with the threat of a winding up petition, please call us on 0121 201 0399 and one of our team will be more than happy to talk you through your options.
A CVL is a voluntary process initiated by the directors and shareholders of a company having recognised that the company cannot pay its liabilities as they fall due. Choosing to enter into a CVL protects the company from facing compulsory liquidation which ordinarily restricts any form of control or foresight into the company’s closure.
In short, a solvent company uses the MVL process to close down their business. In contrast, although still voluntarily undertaken, a CVL involves closure of a company that is insolvent.
✓ Swiftly removes creditor pressure.
✓ Outstanding debts are written off.
✓ Halts further legal action and prevents further losses.
✓ Brings an end to worries regarding company debts.
✓ Provides directors with control and comfort in dealing with their chosen liquidator.
✓ Allows employees to claim redundancy pay and unpaid wages from the government.
✓ Provides ability to discuss existing asset purchase.
✓ Can offer support a business needs to continue trading under a separate legal entity.
Yes you can, providing that you follow the correct legal process; otherwise you could face prosecution and personal financial issues in the future.
Costs are relatively low but please call us now for a free consultation and quote on 0121 201 0399
It can be quite stressful for a director to be unable to repay existing debts with no way of getting the company back on its feet. As you cannot continue to trade if you are insolvent, a CVL offers a way of dealing with these outstanding obligations in a process which aims to maximise the return for creditors.
Notwithstanding this, the prospect of a return to creditors is dependent upon the assets available and costs of the process. In general, the liabilities of the company remain with the company (in liquidation) so you will not be held liable for any of the company’s debts.
The caveat to this, of course, is whether you have signed personal guarantees for one of more of the company’s debts.
As a director or shareholder of a company experiencing financial issues, it can be extremely difficult to prepare and implement a strategy that will change the fortunes of your business.
At Keywood Group we regularly assist business owners and management to explore the different options available.
Generally, if you are a director (or acting as a director), you are not personally liable for paying your company’s debts.
However, in a circumstance where you have signed a personal guarantee, you will be liable for the debt if the company cannot meet its requirements.
The main difference between the two procedures is as follows:
Company strike off/dissolution can be utilised if you have a dormant company or one that has come to an end with no assets or liabilities (thus it is essentially solvent) and an application can be made to the Registrar of Companies directly for the company to be dissolved.
CVL can be utilised if you have a company with or without assets that is essentially unable to pay its creditors and continue trading (thus it is insolvent). In such circumstances you may voluntarily instruct a licensed firm of insolvency practitioners to essentially close the company for you.
Company strike off isn’t best recommended as you may come into various key issues going through this process. Instead, we recommend considering the process of Creditor Voluntary Liquidation (CVL).
If your limited company has become insolvent, you can use a Company Voluntary Arrangement (CVA) to pay your debt to creditors over a fixed period. If your creditors agree with the payment schedule, your limited company can continue trading.
However, if you don’t meet the agreed payment schedule, any of your creditors can apply for a Winding up Order.
One of our team will be more than happy to look at available options for you to help save your business from closure. There are a number of options available which we can help with.
Get in touch with us on 0121 201 0399 and one of our team will be more than happy to talk you through your options.
Keywood Group are an independent leading Licensed Insolvency Practice, providing fully confidential, no obligation specialist advice in all aspects of business insolvency.
Keywood Group adheres to the Insolvency Code of Ethics and our insolvency practitioners are licensed and regulated by the Insolvency Practitioners Association (IPA). All our practices and procedures are regularly monitored to ensure we adhere to strict guidelines in place by our governing bodies.
Our insolvency practitioners have successfully completed the Joint Insolvency Examination Board (JIEB) requirements and have the requisite practical experience to satisfy your needs.
We are also proud members of R3 who are the trade association for the entire community of the UK’s insolvency and restructuring professionals.
We are accredited by the following industry leading organisations