The aim of a business contract is to try to provide certainty for both parties.
Closing My Company
If you are considering closing your company, you may be thinking about liquidating that company. Liquidation is the legal process undertaken by a liquidator which brings a company to a close. Liquidating a company can be undertaken in a relatively short space of time and depends upon a number of factors – the most important being whether the company is solvent or insolvent.
We have significant experience in successfully delivering tailored solutions and offer a full range of services. Where closure of a business is the only option, our team of liquidation specialists understand how stressful this can be, and we will support you throughout the process to ensure that the affairs of the business are brought to an orderly conclusion.
We firmly believe in encouraging businesses and their professional advisers to seek the earliest possible advice when problems arise that could result in financial difficulties. The sooner advice is sought, the wider the range of solutions available. Our liquidation specialists understand that your business is your lifeblood and we are passionate about helping you overcome any challenges that you may face.
We can assist with all types of liquidations and have many years of experience covering all major industry sectors.
SOLVENT LIQUIDATION – MEMBERS VOLUNTARY LIQUIDATIO (MVL)
A solvent liquidation may be appropriate in several situations including the impending retirement of the owners, the reorganisation of a group or the completion of a specific business project.
An MVL is a tried and tested mechanism for bringing a company’s life to an end, involving the appointment of a licensed Insolvency Practitioner as liquidator.
The procedure is initiated by the board of directors with a shareholder resolution being passed to place the company into solvent liquidation. It usually involves:
- Tidying up the balance sheet
- Directors swearing a statutory Declaration of Solvency confirming all creditors will be paid in full, including statutory interest
- Shareholder resolutions appointing Liquidators and placing the company into liquidation
- Liquidators seeking out and discharging creditors and obtaining necessary regulatory clearances
- Liquidators distributing surplus assets to shareholders
A company is dissolved three months after the filing of the Liquidators’ final return at Companies House.
Restoration can take place up to six years after dissolution by an application to the Court.
INSOLVENT LIQUIDATION – CREDITORS VOLUNTARY LIQUIDATION (CVL)
Where a company is insolvent, the factors that need to be considered are very different – this could include a build-up of tax arrears due to HMRC, a sudden and significant bad debt, or perhaps the insolvency of a major customer. Further examples include a build-up of debts due to suppliers/trade creditors which may have caused your supplier and/or as trade accounts to be put on ‘stop’. In some cases, suppliers may have even commencing legal proceedings against you to seek repayment of outstanding invoices. Other companies may be having trouble in managing their existing bank borrowing or possibly facing the withdraw of their current facilities completely.