Company closure can be the result of numerous different circumstances and ultimately becomes a voluntary or compulsory process. Whether a creditor is forcing your company into liquidation or you have chosen to wind-up your company affairs, UK Liquidators’ expert team can advise on the best way forward. Whether your company is solvent or insolvent, liquidation is a delicate process and needs to be handled by a licensed insolvency practitioner, of which we have over 70 across the UK.
In many cases, a company has hit upon hard times and what was once a viable business has become insolvent with creditors petitioning for the company to be liquidated. It is commonplace for HMRC to be a key creditor due to unpaid tax such as corporation tax and VAT and they regularly wind-up companies for this reason – though trade creditors (such as suppliers) could also do this if they have not been paid. The creditor or creditors can apply for a Winding Up Petition to be sent to your company which is the most serious step a creditor can take; they are effectively asking the Crown to shut down your company. Upon receiving a Winding Up Petition, time is truly of the essence as your company could be issued with a Winding Up Order after seven days if you do not act. The first port of call should be to consult with a licensed insolvency practitioner to discuss your options. Thankfully, you can arrange a free initial consultation with one of our local insolvency practitioners at your convenience.
CREDITORS’ VOLUNTARY LIQUIDATION (CVL)
If your company is struggling to the point that it’s become insolvent and you wish to cease trading and close the company, this process is called Creditors’ Voluntary Liquidation – known as a CVL. If you have realised the company is insolvent, it is crucial that your company does not take on any further credit agreements or makes preferential payments to certain creditors as this could be deemed, in a liquidator’s eyes, as worsening the position of all your creditors. You should not continue trading and, instead, consult with a licensed insolvency practitioner with immediate effect. We are experts in the areas of CVL and can advise you today.
MEMBERS’ VOLUNTARY LIQUIDATION (MVL)
Members’ Voluntary Liquidation, usually referred to as an MVL, is the most tax-efficient way of shutting down a solvent company. Liquidation of this nature shouldn’t be confused with company strike-off which is another way in which companies can choose to close but this only applies in certain circumstances. If your company has assets or has a complex, intricate structure with a number of directors or subsidiaries, an MVL will certainly be the best course of action for winding up a solvent business. Our advisers can discuss this with you in more detail as we are doing with numerous directors at present; particularly since the Government announcement the changes to Entrepreneurs’ Rate Relief which has seen an influx in Members’ Voluntary Liquidations.