Creditors Voluntary Liquidation Benefits & Disadvantages?
Entering into creditors voluntary liquidation benefits you, your company and its creditors, while also stopping all action against the company. Immediately. For further reading, please view ‘What is creditors voluntary liquidation‘.
- Stop immediate creditor action;
- Avoid CCJ or Winding Up Order; The appointed liquidator has a duty to examine the reason for the failure of the business. Additionally, they have to examine the former conduct of the companies directors up to their appointment.
- Once appointed, our Liquidator deals with all creditors; directors no longer have to deal with companies creditors unless a personal guarantee is in place. The Liquidator and their team conduct future communications.
- Staff will claim lost pay and redundancy where applicable;
- Claim redundancy as a Director, average £9k of successful claims;
- Eliminate stress; Perhaps the principal benefit of liquidation means it’s a decisive conclusion to the company. Liquidation draws a line, allowing the former directors to move on with a new business.
- Plan your future; Act Now! Don’t then use your personal funds to prop up the business. (especially using credit cards) If you believe you are digging a hole, then stop. It will only get deeper.
What do we do for you?
- Assess your current situation re cash flow and debts;
- Advise if there is a possibility to rescue the business then;
Liquidation benefits – Could some assets be sold?
- Would a Company Voluntary Arrangement work to seek protection from creditors and continue trading;
- Assess your position with regard to any personal guarantees, directors loan accounts, directors redundancy pay;
- Appoint a licensed insolvency practitioner if a Creditors Voluntary Liquidation (CVL) is therefore the best solution. They will take over all dealings with creditors and staff;
Business Liquidated in just four weeks. Leaving you free to plan a new future. You may also buy back the assets of the business and start trading again.
DISADVANTAGES of a Creditors Voluntary Liquidation
Liquidation of a limited company brings to the end the company, and it is removed from the registrar at the companies house.
Allegations of wrongful trading
Once the appointed insolvency practitioner is appointed, one of the essential roles they carry out is investigating the former conduct of those who remained directors. The liquidator must forward a report to the Department for Business, Innovation & Skills (BIS), which is confidential and not for the eyes of any other but them.
The report may prompt action by BIS against the directors, leading to penalties and even a director ban of up to fifteen years, and even a custodial sentence.
Personal liability for debts of the company.
Directors personal liability for debts is usually protected by the fact that the limited company is a separate legal entity to a director.
However, directors may be liable if:
- They guaranteed the creditor personally in the event the company defaults;
- If the director traded while insolvent;
- Involved in misfeasance;
- Any other form of improper actions, including
Overdrawn directors’ current accounts liability
Company directors individually remain responsible for repaying overdrawn director’s loan accounts. Liquidator are empowered to request and enforce directors to repay any monies owed to the company. It liquidation.
The liquidator will sell all business assets.
The appointed liquidator of your company will realise the value of the company’s assets to raise money and provide a dividend to creditors if available.
All employees will be made redundant.
Once a limited company is liquidated, all employees and directors are determined redundant. They are however subject to length of service and paid through the PAYE scheme able to claim. Statutory redundancy.
ACT TODAY FOR FREE CONFIDENTIAL ADVICE.