Liquidations
Insolvent Liquidations
Often it is not possible to sell an insolvent business. This may be due to the nature of the business or because the business is not seen as viable under prevailing economic conditions. It is often the case that the company's directors do not get help in sufficient time to allow the company to be saved.
Any of these reasons can lead to a company being placed into liquidation and its assets sold off. In this process the business, as distinct from the company, may be sold which may include the company's trading name. The proceeds of these sales are then distributed to the creditors, in a defined order of priority.
Liquidation, usually, represents the end of the company and it will then be dissolved; formally removed from the companies register.
When the company is placed in liquidation on the recommendation of its directors or shareholders it is known as a Creditors Voluntary Liquidation (CVL). This is distinguished from the situation where a court make a winding-up order for a Compulsory Liquidation on the application of a creditor or of the company itself.
Solvent Liquidations
A company may, also, be placed in liquidation where the company is solvent. Such a liquidation is known as a members’ voluntary liquidation (MVL), in which the liquidator is appointed by the shareholders and the company’s assets are sufficient to settle all its liabilities, including statutory interest, within twelve months.
Fax: 0161
438 8554