Company Liquidation Services
The most common type of insolvency procedure is liquidation (or winding up) of a company.
Byrne Associates can offer a professional Insolvent liquidation service that is appropriate where there are insufficient assets to pay creditors in full and the liquidator will realise all of the company's assets and distribute them in the prescribed order of priority.
It may be the end of the road for the company, but that it does not necessarily mean it is the end of the business of the company.
The Insolvency Act places onerous obligations upon directors whose companies are insolvent and the company may have no alternative but to close down.
Please call Alison Byrne on 07889 363 321 or contact us if you would like to speak to one of our insolvency practitioners about liquidating your company.
Creditors Voluntary Liquidation (CVL)
In a CVL, the directors remain in control of the timing of events, At their request, the shareholders decide to put the company into liquidation because its liabilities exceed assets or because the company cannot pay its debts as and when they fall due.
- Board meeting held to resolve that the company cannot continue to trade because of its liabilities. The directors also resolve to call a meeting of shareholders (EGM) and creditors (s98 meeting)
- During this period, the business ceases to trade and the insolvency practitioner drafts a final balance sheet (called a statement of affairs) on behalf of the directors and for their approval
- Shareholders and Creditors vote for the insolvency practitioner that they wish to be appointed liquidator at the EGM and s98 meetings
- Once appointed, the liquidator will collect in the assets, agree creditors' claims and, where there are sufficient funds, pay a dividend to creditors
- The liquidator must also investigate the events leading up to insolvency and lodge a report on the directors conduct to DBIS
- Liquidation flow chart
Compulsory Liquidation – professional help from Byrne Associates
A compulsory liquidation (or winding up) happens as a result of a Court Order and takes any element of control out of the directors hands.
Usually the Order is made after a company fails to comply with a Statutory Demand or an unsatisfied execution against the company's goods. The liquidation is performed by the Official Receiver, who will appoint an insolvency practitioner to act as liquidator if there are sufficient assets to be dealt with.
The liquidators duties are the same as a liquidator in CVL although the investigation function remains with the Official Receiver.
Upon the presentation of a winding up petition, the company's bank account is frozen, preventing any further trade. It is almost always too late for an insolvency practitioner to help save a business where a winding up petition has been issued.
Members Voluntary Liquidation (MVL)
An MVL is a solvent winding up of a company.
A liquidator is appointed by the shareholders where the company's assets are sufficient to settle all its debts within 12 months. The MVL is a tax efficient way of turning reserves into capital and thereby paying Capital Gains Tax rather than Income Tax on any distribution.
- Board meeting held to resolve that the company is to be wound up and a meeting of shareholders to be convened
- Less than 5 weeks prior to the shareholders resolution to wind up the company, the majority of directors must make a statutory declaration that the company can meet its liabilities with interest, in full, within 12 months. (The insolvency practitioner or accountant usually assists in drafting this document)
- The liquidator will collect in the assets, agree creditors' claims and distribute any surplus funds to shareholders
- There is no duty for the liquidator in MVL to investigate the conduct of the directors
- It is a criminal offence to make a statutory declaration without reasonable grounds for believing it is true
- Solvent Liquidation flow chart
If you need professional help or service with the liquidation of your company then call us on 07889 363 321 today or contact us here.
25 April 2016
22 March 2016
20 January 2016
- Head Office: Suite 3 Farleigh House, Farleigh Court, Old Weston Road, Flax Bourton, Bristol, BS48 1UR
- Tel: 07889 363 321