“Our largest customer has refused to pay us and now HMRC are threatening to wind us up, I think I may have to close down and cease to trade but how should I deal with the insolvency and rescue the value of the business in this situation”
We see business liquidation as the last resort. We understand you want to keep your company alive and trading. But if your company is insolvent and can no longer afford to trade we also know that the decision to liquidate your company can bring an end to weeks of worry, stress, and sleepless nights.
What some directors don’t realise is that liquidating a loss making company isn’t just a way of cutting your losses and closing down the business. It can also provide an opportunity to relaunch the business debt free, with the assets, employees and goodwill transferred and sold to a new phoenix company, which is debt free.
Of course, you may wish simply to walk away from what you believe is an unrecoverable situation, but you may also want to get that second chance having learnt some very valuable business lessons. Either way, it is important you take proper advice and have all options, including business turnaround strategies explained. Remember it is important to understand the pro’s and cons, and have the upsides and downsides explained before making a final decision.
Let us help you take a step back from the situation and explore all of your options. Call us free on 0800 0385 140 or request a callback for expert insolvency advice
What is a Creditors Voluntary Liquidation?
Liquidation is a legal method by which a company is closed down and its assets are sold to pay off its debts. A creditors’ voluntary liquidation is one form of this. When people talk about liquidation, they usually mean a CVL.
Once the directors and the shareholders of a company have decided to pursue a CVL, an insolvency practitioner will be engaged and a meeting of the company’s creditors is called. At the meeting, the creditors get the chance to approve the decision – hence the term ‘creditors’ voluntary liquidation’.
The insolvency practitioner or IP will oversee the process and ensure all the rules and regulations are adhered to. They effectively take over the role of the directors to finalise the affairs of the company.
Once all the assets have been sold off and the process has been completed, the company is dissolved and removed from the Companies House Register.