WHAT IS LIQUIDATION?
Liquidation essentially means the end of a company’s life, whether voluntary or compulsory. The company’s assets are sold to generate cash to pay off outstanding debts wherever possible.
Creditors Voluntary Liquidation (CVL)
The most common form of liquidation in the UK is a Creditors Voluntary Liquidation (CVL), where the company has run out of cash and the directors decide that it is no longer a viable organisation. They may be worried about becoming personally responsible for the company’s debts.
There are a number of meetings required in this process. If necessary, we can call these meetings and place your company into liquidation in less than a fortnight. Once you have made the decision to liquidate, the company should cease trading or you could be held accountable for wrongful trading.
Compulsory (winding up petition)
A compulsory liquidation generally occurs when a creditor feels like they have exhausted all of their options in chasing a company for money owed and issue a ‘winding up petition’. This is generally a last resort as it is an expensive process, but when large debts are owed it can be worth it for the creditor.