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Company Liquidation

What is Company Liquidation?

Company liquidation falls into two distinct categories, insolvent liquidations commonly known as Creditors Voluntary Liquidations (C.V.L.s) and solvent liquidations or Members Voluntary Liquidations (M.V.L.s).

Is a Company Liquidation right for my Business?

How do you know which type is the most appropriate for your business? Your company is insolvent if it cannot pay its debts as and when they fall due (“the commercial test”). A company is also insolvent if the company’s balance sheet shows that its liabilities exceeds its assets (“the balance sheet test”). If either of these tests apply then the type of company liquidation you would need to be considering is a C.V.L.

We are regularly approached by company directors who have been advised by their company’s accountants that they need to do a Members Voluntary Liquidation. An M.V.L. is a procedure were there are surplus assets available to the company’s shareholders (or members), after all of the company’s creditors have been paid in full.

A common factor with both types of company liquidation is that only a Licensed Insolvency Practitioner can act as Liquidator.

If you require advice on either type of liquidation, please contact us on 08081 446611.

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