Your company’s closure via liquidation, whether solvent or insolvent, will require you as the director to instruct a licensed and regulated insolvency practice such as ourselves for advice to carry out these processes for you.
One of our licensed insolvency practitioners (IP) will be the one to carry out a solvent or insolvent liquidation. There are two liquidation options for insolvent companies, a creditors voluntary liquidation (CVL) – this is when a director voluntarily decides to close their insolvent company before the situation gets worse – and a compulsory liquidation – this is when a company’s creditor issues a winding-up petition effectively forcing the company into liquidation, through the courts
For a solvent company wishing to close down, a members voluntary liquidation (MVL) may be a suitable option. It puts a tax-efficient end to a company which has sufficient in asset value to settle all liabilities.
If you choose or find yourself in the position where you need to go down one of these routes, one of our IP’s will act as liquidator providing you with the necessary advice, helping to close down your company and deal with any creditors and employee issues, including coordinating claims to the redundancy payments office for the latter.
The liquidator’s role in CVL
After your company enters into a CVL, we will collect any assets and realise them to turn them into cash. This will be paid to your company’s creditors on a pro rata basis after agreed costs and fees have been deducted.
In a CVL, as liquidators, we will handle the liquidation process by contacting creditors and if necessary, organising the creditors’ meetings, completing and filing all necessary paperwork and investigating the conduct of the director(s) of the company for the three years prior to the liquidation starting.
Throughout the process, we will:
- Turn any company assets into cash to be distributed to creditors
- Process any claims that we receive from creditors of your company
- Assist employees to claim arrears of wages, holiday pay, redundancy and pay in lieu of notice when applicable.
- Investigate the company director(s), as well as any shadow directors, and report on their conduct to the relevant authorities/parties.
- Distribute cash to creditors of your company on a pro rata basis as and when money is made available
The liquidator’s role in a compulsory liquidation
A company will be placed into compulsory liquidation after a winding-up petition has successfully been filed against the company by a creditor or a director. If the petition is not dealt with quickly and removed, the case will be passed on to the official receiver (OR) – a civil servant and High Court officer – who will deal with the liquidation in the first instance.
On most occasions, the OR will pass the liquidation procedure over to an insolvency practice like ourselves. However, on an occasion when the OR deals with a compulsory liquidation, they will deal with the paperwork of the case, investigate director conduct and report any evidence of criminal activity and conduct.
When Wilson Field deals with a compulsory liquidation, we act as liquidators completing the same tasks as the OR and reporting any findings of unfit conduct of directors to the insolvency service. Once your company is in compulsory liquidation, you will no longer be in control of the business or any assets or property relating to the business.
Any powers you have as director of the company will cease with immediate effect, meaning that you will no longer be able to act for/on behalf of the company. You will still have your director responsibilities to comply with, such as looking out for the best interests of your creditors, but you will no longer be able to manage the day to day business affairs.
Once the company enters into compulsory liquidation, you should not use or sell the company’s assets in order to make payment to your creditors or for your own use/benefit.
If you are also an employee of your company (as well as director), your employment will cease when the winding up order is issued. The OR/IP dealing with the liquidation will be able to provide you with details on how to claim for any unpaid wages, holiday pay, redundancy and for pay in lieu of notice, as an employee of the company.
The liquidator’s powers in a compulsory liquidation
If Wilson Field are appointed, we would:
- Take over the day to day management of the company from the director when they are appointed.
- Sell the company’s assets.
- Be able to bring and defend legal proceedings regarding the company.
- Assist with employee claims.
- Pay dividends to unsecured creditors, if enough funds are available after company’s assets have been sold and costs have been paid.
- Consider all claims from creditors.
- Investigate the director(s) for the 3 years prior to liquidation.
The liquidator’s role in MVL
When you decide that you would like to close your company via MVL, you will need to get in touch with a tax specialist to obtain tax advice prior to entering into the MVL procedure.
After you have done this, get in touch with us and we will be able to talk you through the MVL process and what is involved for you and your company in this solvent liquidation procedure.
We will help you to prepare all the paperwork required including the statutory declaration of solvency which needs to be completed before an MVL can take place. We will then obtain the necessary creditors and legal notices, arrange any required meetings and guide you through the process.
After the company has been dissolved and your obligations as director have been removed, payments will be issued to you and all shareholders, after they have been received.
In order to make sure your MVL goes through quickly and to obtain our MVL price of £1,695 (plus VAT and liabilities), you should:
- Sell any remaining company assets
- Make sure any and all liabilities are paid
- Ensure all tax returns have been completed and submitted
- Collect any money which is owing to the company
- Deregister your company for VAT and as an employer
- File the latest company accounts up to the date the business ceased trading
To find out more about these different types of liquidation and how we can help you, get in touch with us on 0800 901 2475. Our friendly, professional advisers will be able to point you in the right direction for your company regardless of its situation.