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Looking to liquidate your business? For help call 0300 303 8284
Looking to liquidate your business?
For help call 0300 303 8284

What is liquidation of a company?

If you, as a director of the company, see that your business is insolvent and you choose to stop trading and close the company – this is a creditors’ voluntary liquidation (also referred to as a CVL).

Once you have identified that continuing to trade will harm the chance of your creditors receiving payment for their debt, you should seek professional advice from a licensed Insolvency Practitioner to understand the options available to you at this point. If the Insolvency Practitioner deems this the most appropriate action for your business, the company assets are then valued and sold with an aim to pay off the creditors.

What is a Compulsory liquidation?

A compulsory liquidation is when the business has often fallen into debt, one which was previously a viable and profitable business but is no longer solvent and creditors are petitioning for the company to be liquidated for them to receive their outstanding debt.

The creditor has applied for a winding up petition for your company and they are requesting that the courts step in and close your business down. Once a winding up petition has been requested you should take steps to deal with this quickly, as once granted, the next stage is a winding up order whereby your company will be liquidated by an Insolvency Practitioner.

If your business is in the process of going into compulsory liquidation it’s important to make sure you have an advisor to assist you through the process – we assist many businesses who have been put into compulsory liquidation and can explain your rights throughout the process.

What is a Members’ Voluntary Liquidation?

Unlike a Creditors’ Voluntary Liquidation, this form of liquidation is whereby a company is solvent but you still want to liquidate the business. Liquidating your business this way isn’t the same as closing down your company through a “striking-off” with Companies House. It is often regarded as a tax efficient method of extracting any remaining value from a business when comparing to closing a business via Companies House.

Contact The Insolvency Experts

For more information on liquidation visit our how does the liquidation process work? page or please see one of the below sections. Contact The Insolvency Experts to discuss any concerns you may have regarding business liquidations. Alternatively, call us directly on 0300 303 8284.

Our insolvency experts are here to help Call 0300 303 8284

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What is liquidation
michael beal