What is a Voluntary Liquidation?
A voluntary liquidation is an alternative to a compulsory winding up order before the Court. There are two seperate types of voluntary liquidation, namely:
- A Members Voluntary Liquidation – which is normally reserved for solvent companies.
2. A Creditors Voluntary Liquidation – which is generally reserved for insolvent companies.
Both forms of liquidation in practice bring the company to the end of its trading life, and involve realisation of the company’s assets in order to pay stakeholders (primarily creditors) as much as possible.
A Members Voluntary liquidation is used when the company is solvent and is able to repay all of its debts, interest and costs within 12 months, with any remaining funds being returned to the shareholders of the business after all the fees have been paid.
Where a company is insolvent the directors and shareholders can take steps to place a company into Creditors Voluntary Liquidation in order to bring the company to the end of its natural life. Directors ought not to continue trading, to avoid potential proceedings that may be brought by the liquidator susequently, beyond the point of any time when they knew or ought to have concluded that a company could not avoid an insolvent liquidation.
How Do I Liquidate My Company?
Instruct Tax Office DM to assist in the preparation of the paperwork and collate all the initial information that is required for liquidating.
It is not too late to place your company into liquidation even if your company has a Winding up Petition. To do so may be in the best interest of the
Once Tax Office DM has received instructions to assist in the preparation for a liquidation, events move quickly. A licensed Insolvency Practitioner is instructed and meetings of the company’s shareholders are convened and the process for the liquidation can commence.
It is important to remember that your view on your own company may be based on the creditor pressure that you receive on a daily basis and that this view may be changed if you read our section on Company Voluntary Arrangements (CVA’s).
Talk To Silke & Co NowTalk to an Insolvency Practitioner today on: 0800 1777066
Creditors Voluntary Liquidation
Frequently Asked Questions
Can We Use The Same Company Name Again?
What Are Tax Office DM Charges To Assist In Putting A Creditors Voluntary Liquidation In Place
Tax Office DM do not charge for their services in assisting with the preparation of Creditors Voluntary Liquidations. Tax Office DM forms part of the same group of companies as Silke & Co, a licensed insolvency firm. In the event that Silke & Co are instructed to assist with placing the company into liquidation then they will charge a Statement of Affairs fee and if they are appointed as liquidators they will be entitled to draw remuneration for acting as liquidator from any
What Are The Liquidators Duties?
A liquidator has a duty to investigate the affairs of a company in a Creditors Voluntary Liquidation. If the standard of conduct of the directors has fallen below that of the reasonably prudent director, then the liquidator:
- Will have to report this to the Secretary of State for Business, Energy and Industrial Strategy, who could (subject to it being in the public interest to do so) bring proceedings pursuant to the Company Directors’ Disqualification Act 1986 against the relevant directors: and
- May consider whether to bring antecedent transaction claims (proceedings for financial gain) against the directors.
What Will My Bank Say If I Liquidated My Company?
If your bank does not hold a debenture against your company or a personal guarantee then they will rank alongside the other unsecured creditors of the company.
Winding up Petition Help
This can significantly adversely impact upon a company’s ability to pay its creditors as and when the same fall due. We can assist the company in making an application for a validation order, an order of the Court
Tax Office DM can assist in attempting to prevent this by assisting the company in applying to Court for a validation order, for specified payments to be made from the frozen bank account.
The bank should reopen the company bank account once they have received written evidence that a Winding up Petition has been dismissed.
Tax Office DM can also assist with instructing a Barrister or solicitor to seek an adjournment of the