Voluntary Liquidation

Although liquidation means that your business ceases to trade, in some circumstances it can be that this is the only viable solution to debt problems.

Provided that the directors have acted responsibly, they will not be personally liable for any of the company’s debts unless they have signed personal guarantees. A personal guarantee may not be valid if you were not advised to take legal advice before signing.

A company can be forced into liquidation by a creditor issuing a winding-up petition by claiming a debt due of over £750 has not been paid due to the company being insolvent. This process no longer requires that the creditor first present a writ or statutory demand for the debt and many legal firms and debt collection agencies routinely adopt this drastic measure.

If you have received a statutory demand, or if a winding-up petition has been presented against your company, you need immediate advice. You can consult us on 0800 694 1400.

It is always better that the directors recognise the company’s problems before creditors commence winding-up proceedings. Failure to do this can lead to criticism from the Insolvency Practitioner appointed by the creditors or the Court.

If liquidation is the only viable solution, it is usually possible for the directors to appoint an Insolvency Practitioner of their own choice and place the company into Voluntary Liquidation. The creditors must approve the choice, so it is important that a Practitioner acceptable to the creditors is chosen. If the company has no assets, it will be necessary to set aside a sum of money to cover the Practitioner’s fees.

We can advise you on which Practitioner would be suitable for your own circumstances, and on the following important matters which can be dealt with before the appointment of an Insolvency Practitioner:

Possible alternative solutions

Planning for the cessation of trade

Contact with your creditors

Dealing with personal guarantees

Re-purchase of assets to re-start the business

Assistance with the documents needed for the Court

Preparation of a Statement of Affairs

Agreement of fees if the company has no assets

We have good relationships with a panel of carefully selected Insolvency Practitioners, and will recommend a suitable appointee for your own circumstances. Because of our close relationship, it is easier for you to explain what went wrong and your actions prior to the appointment. This can be important since the Practitioner must submit a report to the DTI, commenting on the directors’ actions including a recommendation of whether legal proceedings against the directors is appropriate.

 

Debt and Bancruocy adviceBankruptcy – a complete guide to IVAs and business bankcrupcy

When you or your company are made bankrupt, your assets (possessions, home, income etc) can be used to pay your debts. You have to agree to certain restrictions and your financial affairs will be investigated. Find out how bankruptcy affects you and where to get advice on dealing with your debts.

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