Liquidation Articles

Dealing with liquidation If you are experiencing difficulties running your company or believe that it is insolvent then you must cease trading and be prepared to face liquidation. Compulsory liquidation Compulsory liquidation occurs when the company is given a winding up order by the court. Seeking help for liquidation The breakdown of a company can be a stressful time for all involved. When going through the process of liquidation, there are plenty of steps that can be taken to ease the stress of the situation.   Reforming a company after liquidation There is a chance that a company can reform after liquidation. The money from the company’s assets can be used to begin a new company.   How to recognise when your company is ready for liquidation There are several factors that contribute towards a company making the decision to enter liquidation.   How to liquidate your company If you have decided that liquidation is the best option, then there are many steps that you will need to take.   How to avoid liquidation There are steps that companies can take to avoid liquidation. Identifying problems sooner can save companies from facing liquidation.   How liquidation affects employees As well as liquidation being a difficult time for owners, it can also have a negative effect on the company’s employees.   The advantages and disadvantages of liquidation It is important that companies are aware of the pros and cons of undertaking liquidation.   The aftermath of liquidation Liquidation can have a series effect on the future of those previously involved in the company.   The role of the liquidator When a company enters liquidation, the liquidator plays a large part in the process. Liquidators will need to be fully trained and can operate on their own or via a court.   Types of company liquidation There are three main types of company liquidation. The type of liquidation that the company goes through can depend on a number of reasons.   Types of liquidation There are three main types of liquidation. A company can either be liquidated voluntarily or involuntarily.   How to deal with liquidation   Liquidation is a process that is undertaken by companies that can no longer operate, mainly due to insolvency issues.     What is liquidation? Liquidation is the process of a company coming to an end. When a company enters liquidation, its assets are sold and turned into cash, which is used to pay off creditors.   How companies can decide which liquidation process is best Companies can decide which liquidation process is the best option for them by reviewing their financial situation and looking at other reasons as to why the company may need to be liquidated.   Pros and cons of liquidation There are advantages and disadvantages to the liquidation process. Before a company decides to liquidate, it is important that they are aware of what benefits the process holds and what problems the company may be likely to face.   Reforming after liquidation Liquidation can be a devastating procedure for some companies as it may seem like the end, but there is a chance that some company directors may be able to buy their business back.   The company liquidation process Once a company has reached the decision to liquidate, the liquidation process will begin. The procedure will vary depending on what type of liquidation process the company goes through. For a Members Voluntary Liquidation (MVL) and a Creditors Voluntary Liquidation (CVL), a liquidator will need to be appointed in order for the process to be completed.   The most common type of liquidation Perhaps the most common type of liquidation is a Creditors Voluntary Liquidation (CVL). This is a process that is usually entered by companies that are insolvent. In order to initiate a Creditors Voluntary Liquidation, a meeting must be made by the board of directors and the shareholders of the company.   Why companies enter liquidation There can be a number of reasons as to why companies may decide to enter liquidation. The main reasons is usually if the company is insolvent. If this is the case, then the company may liquidate voluntarily or compulsorily depending on the severity of the debt.   Why companies liquidate There are a number of reasons why companies may decide to liquidate. One of the main reasons is if a company is insolvent. Companies with insolvency issues may go through a Creditors Voluntary Liquidation (CVL).   The difference between bankruptcy and liquidation Bankruptcy and liquidation are similar but there are differences. Liquidation usually occurs with companies whilst bankruptcy often affects just individuals. With liquidation, assets will be sold in order to pay off creditors and the company is usually brought to an end.   How companies deal with creditors during liquidation The liquidation process can be difficult for companies, particularly during compulsory liquidation or a Creditors Voluntary Liquidation (CVL). During these processes, companies may face problems with creditors.   How liquidation affects companies How a company is affected by liquidation may depend on the type of liquidation procedure that the company goes through.   Signs that a company is ready to be liquidated voluntarily If a company is struggling financially, then it could be time to enter the liquidation process. If a company director feels that a business can no longer continue then they may arrange a meeting with shareholders to make the decision to liquidate the company.   The causes of liquidation There are a number of reasons why a company may go though the liquidation process. When companies liquidate, they are usually insolvent.   Compulsory liquidation in a company The liquidation of a company is not always voluntary. If a company is in severe debt, then it may end up being liquidated compulsorily.   Why companies are liquidated compulsorily Companies are liquidated compulsorily as a result of creditors taking action due to the company’s insolvency issues.   What the future holds for companies after liquidation Despite liquidation being a disheartening process for some companies, it does not mean the end. Some company directors may wish to continue trading.   How companies decide which type of liquidation is best The type of liquidation that a company enters depends on what reasons the company have decided to liquidate for.   How to deal with liquidation Liquidation is a process that is undertaken by companies that can no longer operate, mainly due to insolvency issues.