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When a limited company is insolvent – meaning either its debts are greater than its assets, or it is unable to pay its bills and other outgoings as and when they fall due – directors need to make a decision whether the company has a realistic possibility of being turned around, or whether it should be placed into liquidation.
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If you are a limited company director worried about how you are going to repay your Bounce Back Loan, we are here to help. As licensed insolvency practitioners we can talk you through your options when it comes to repaying your outstanding Bounce Back Loan, as well as handling all negotiations with creditors on your behalf. Call our team today on 0800 063 9262 .
When a company is liquidated, all its assets are sold with the proceeds being distributed amongst outstanding creditors. The company will eventually be dissolved and it will cease to exist as a legal entity. An insolvent company can be liquidated either through a compulsory court-order, or through a voluntary process known as a Creditors’ Voluntary Liquidation (CVL).
A CVL is a director-initiated liquidation process which must be administered by a licensed insolvency practitioner. Once the director – or directors – of a limited company know the business to be insolvent, they can decide to voluntarily shut down the company by placing it into a CVL. They will select an insolvency practitioner of their choosing who will work towards realising company assets, and ensuring the company is wound down in an orderly manner in accordance with the Insolvency Act 1986.
Director Redundancy Entitlement – Did you know that as a limited company director, you may be entitled to claim redundancy if your company enters into an insolvent liquidation process? We can point you towards a fully regulated third party who can provide advice on your right to claim director redundancy if this is applicable to your situation. To understand if you are entitled, give a member of our team a call on 0800 063 9262, or email [email protected].
Liquidation Portal
For Company Directors
The appointed insolvency practitioner will be responsible for dealing with all outstanding creditors throughout the liquidation process, as well as distributing all available company assets as per a designated order of priority depending on the class each creditor falls into. Creditors will be paid in the following order:
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Although a CVL is considered a voluntary process, the reality is that when it gets to this stage, often directors have no choice left but to place their company into liquidation. As the director of an insolvent company, you have a legal responsibility to protect the interests of your creditors and to refrain from any action which may worsen their position. Once you know your company to be insolvent, your creditors’ interests must be placed above your own and those of other shareholders. By being proactive and taking this step voluntarily, rather than being forced into compulsory liquidation, demonstrates your responsibility as a limited company director, as well as showing a duty of care to your creditors.
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
The director will be responsible for paying the fees associated with the liquidation, but in many cases, this can be taken from the company’s assets. Many directors are also classed as employees of the company and receive a salary in payment for the work undertaken. In these instances, directors are often eligible for a redundancy payment following their company entering into an insolvent liquidation procedure such as a CVL. Redundancy for directors works in much the same way as redundancy for employees, and can be a vital lifeline for those struggling financially in the wake of their company becoming insolvent.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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