What Is Liquidation?
When insolvency threatens as all other options, i.e. Administration, Company Voluntary Arrangement, etc have been examined, the other procedures to resolve the company’s problems usually involve liquidation. If the company is insolvent the liquidation options are a Creditors Voluntary Liquidation or a Compulsory Liquidation.
Creditors Voluntary Liquidation
A Creditors Voluntary Liquidation is initiated by the shareholders passing a Resolution to wind the company up followed by involvement by the creditors. The necessity to hold physical meetings of creditors can now be avoided by creditors agreeing to the appointment of a Liquidator by deemed consent. This new procedure can be completed with the assistance and guidance of Simmonds & Company who will ensure all procedure is carried out correctly.
If a substantial creditor decides to wind a company up, they can make application to the court to obtain a winding-up order. Following this, the Official Receiver is appointed Liquidator and may decide to allow the company creditors to nominate an alternative liquidator. Should winding up action be instituted against the company, again Simmonds & Company can assist and advise on the options available to the directors.
Members Voluntary Liquidation
If the company is solvent, however, then the directors may consider a Members Voluntary Liquidation whereby all creditors are paid within 12 months. The reasons for winding up the company could be that the purpose of the company has been achieved and fulfilled or the shareholders wish to obtain a tax-efficient release of their capital by applying Entrepreneurial relief, thus availing themselves of a reduced rate of tax.
Get in Touch
If you want to discuss the possibility of liquidating your company, or any other avenues of debt relief, call Simmonds & Company today on 0161 476 5445 to arrange a free, confidential, no obligation appointment, or send a message through our contact page and we will get back to you as soon as possible.