Company liquidation
Company liquidation is the process whereby the assets of the company are realised and distributed among its creditors according to their legal priority and entitlement.
Liquidation may occur following a receivership or administration. Alternatively, the company’s directors or shareholders may recommend that the company be put directly into liquidation via either a Creditors Voluntary Liquidation (CVL) or a Members Voluntary Liquidation (MVL) or a Court can make a winding up order for a compulsory liquidation on the petition of a creditor or the company itself.
For insolvent companies there are two main types of liquidation:
- in a Creditors´ Voluntary Liquidation (CVL) the directors pass a resolution to wind the company up. A creditors' meeting is held to nominate the appointment of a liquidator and consider a statement of affairs.
- in a Compulsory liquidation creditor’s petition to the court for the company to be wound up.
Within six months of a company being put into liquidation, the Insolvency Practitioner has a duty to report to the Department of Trade & Industry (DTI) on the conduct of any director of an insolvent company who has been a director within 3 years from the date of insolvency. This could lead to prosecution and disqualification.
For free advice on company liquidation contact us via our confidential debt advice form or call us now on 0114 244 6200.
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