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If you are thinking of a company voluntary liquidation, then you need to be prepared before you decide to go ahead with it. Before you do so, you will need to analyse the situation that your company is currently in. If you are struggling with debts, then your company will be likely to result in a Creditors Voluntary Liquidation. It is important to identify any insolvency issues so that a decision can be made on how to liquidate the company. Seeking professional advice is a good idea for those who are unsure of the best option to take. You will need the help of a qualified insolvency practitioner to help with the winding up process. The quicker and easier the company can be brought to an end, the less stressful the process is likely to be. If your company is thinking of voluntary liquidation, then you will need to be sure that the business does not continue to operate. You will need to publicise your liquidation so that customers are aware that the business will not be continuing. If you are in the process of ordering supplies, then you will need to cancel them. Employees will also need to be informed of the company voluntary liquidation. This part of the process is sure to be difficult, so it is important that the company deal with the situation in the right manner. Depending on your financial situation, there may be a chance that your company can be saved. If you believe this is the case, then you may be able to avoid liquidation. There are many alternatives to liquidation, so seeking the help of a business advisor is a good idea so that you can consider the other options available. You may be able to take an alternative route that will allow you to pay off your debts and give you more time to get the company back on its feet.
What is a Company Voluntary Arrangement?
A Company Voluntary Arrangement (CVA) is a process that allows companies to remain in business whilst paying off creditors. It is an alternative to liquidation and the best option for companies that wish to solve debt problems and get back on their feet. A Company Voluntary Arrangement begins with a company reaching an agreement with creditors in order for the creditors to receive payments that they are owed. The company director must decide how and when the company are able to provide payments, presenting a payment plan to the creditors. If the creditors approve, then an agreement will be set up. The Company Voluntary Arrangement process is ideal for company directors who wish to keep control of their company. During processes such as liquidation, the company director will no longer be able to run the business as a liquidator will take over but the Company Voluntary Arrangement process allows the director to remain in that role. Before going through the Company Voluntary Arrangement process, companies should seek advice from an insolvency practitioner. If a company is in severe debt, then creditors could end up taking action before the company has chance to set up an agreement. Insolvency practitioners will be able to advise the company and take the company through the Company Voluntary Arrangement process if a decision has been made to undertake it. If a company is experiencing financial problems that are not too severe, then they may have a chance of saving the business. However, it is important that company directors are aware that creditors will need to accept a Company Voluntary Arrangement proposal before the process is properly undertaken. Once an approval has been given, the company can then focus on getting back on track whilst paying off debts at a comfortable pace.
The company voluntary liquidation process
The company voluntary liquidation process varies depending on the type of liquidation procedure being undertaken. There are two types of voluntary liquidation that a company can go through. If the company is solvent and wishes to bring the business to end for other reasons, then it will go through a Members Voluntary Liquidation (MVL). If the company is insolvent, then it will go through a Creditors Voluntary Liquidation (CVL). Both procedures require a liquidator, who is responsible for the winding up of the company. If a company has entered a Members Voluntary Liquidation, then the company directors will need to declare that the company is solvent. The process is much more straightforward than a Creditors Voluntary Liquidation, which is mainly due to the fact that the company is usually solvent. The Creditors Voluntary Liquidation process requires more involvement from the liquidator, who will need to carry out a full investigation into the company’s affairs to determine the reasons for the company’s insolvency. During this process, the company directors will lose control of the company. The liquidator also deals with creditors directly, which can be an advantage for some companies as it prevents further problems from arising. During the liquidation process, company directors will need to ensure that the company ceases trading. The liquidation will need to be made public and all employees will need to be informed of the procedure, which can often be a difficult process for all involved. In order to avoid liquidation, it is important that companies recognise any insolvency issues early on and contact a financial advisor, who will be able to provide details of alternative procedures to liquidation. An insolvency practitioner will be able to assist companies with alternative procedures such as informal arrangements between the company and its creditors and will ensure that all payments are made on the dates specified by the company director.