Yes, you can.
If your limited company is insolvent, and there’s no option to rescue or restructure it, then your best option is likely to be a Creditor Voluntary Liquidation (CVL). Instead of waiting to face the implications of a compulsory liquidation, a CVL is generally the preferable option.
A CVL can be proposed if your company can’t pay its debts, and the shareholders have agreed to pass a ‘winding-up resolution’. It will allow your company to stop trading and be liquidated, while acknowledging your duties as a director to your creditors.
Companies often use assets which are liquidated as part of the CVL process, to cover the cost of all or part of the CVL. However, a CVL can still be the best option if your company has no assets – it just means that you will need to find another way to pay your liquidator (Insolvency Practitioner).
Liquidating your company with no assets
If your company has no assets, it can still go through the CVL process.
It begins by passing a winding-up resolution, which must be agreed by the majority of the company shareholders. After which Companies House will be informed and an advert will be placed in the Gazette announcing the resolution.
After this, a liquidator will be appointed, who assists you in preparing the Statement of Affairs. This provides details as to why your company became insolvent, and is sent on to creditors who will be able to lodge their claim against your company.
After the whole liquidation process is complete, your company will close down and be removed from the register at Companies House. Keep in mind that, if necessary, the liquidator’s investigations may continue after this.
CVL with no assets
Generally speaking, a CVL can take up to 12 months to complete, but for the majority of cases the process won’t last as long as that. If, as a director, you work for the company under a contract of employment, you could be eligible to claim redundancy pay from the National Insurance Fund (NIF). This could work out to be a substantial sum, which could ease your finances during this stressful time.
At Clarke Bell, the cost for a CVL is from £2,995 +VAT.
If you would like advice about how best to deal with your company’s situation, our specialists at Clarke Bell can help you.
For free, no obligation advice, contact us on 0161 907 4044.