What is a Creditors Voluntary
Liquidation?
This route is usually the last resort for a company, as it is insolvent and cannot continue trading and is the most common form of Liquidation in the UK.
With the assistance of an Insolvency Practitioner, directors would arrange meetings with the company members and creditors in order to wind the company up and appoint a Liquidator.
If the company had not already done so, it would now cease to trade.
All assets of the company including any book debts would be realised and proceeds of these would fund the cost of the liquidation and any excess funds would be available as a dividend to creditors in the order
of priority.
If the company has insufficient assets to cover the associated
costs the Liquidator may require the directors to
personally pay the costs. The
level of these would be agreed between both parties prior to
the Liquidator proceeding.
At the meeting of creditors, a report would
be presented detailing the history of the company,
its financial circumstances and why it has gone
into Liquidation. Creditors would be given the
opportunity to ask the directors questions and
would then formally vote for the appointment of
a Liquidator.
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