fbpx
Client Portal
Under what circumstances might you voluntarily liquidate your company?
19 July 2019
Category FAQs

There are two main situations when you might be thinking about voluntarily liquidating your company:

  • your company is insolvent (i.e. it can’t pay its bills when they’re due) and you’re thinking of closing it down
  • your company is solvent (i.e. it has no debts that it can’t pay), but you don’t want it any more

Insolvent Liquidation (CVL)

An insolvent liquidation is formally known as a Creditors’ Voluntary Liquidation (CVL). This occurs when shareholders and directors agree to place the company into liquidation because it can no longer pay its bills when they are due; and creditors are chasing for payment. This is the most common form of liquidation in the UK.

In a CVL all trading ceases and any company assets are sold. A CVL is typically used when:

  • your creditors are chasing for money to be repaid and you’d like to avoid your company being forced into liquidation (i.e. put into Compulsory Liquidation)
  • you want to protect your personal finances from business debts
  • your company is showing no signs of recovery
  • you want to avoid any accusations of wrongful trading.

Solvent Liquidation (MVL)

A solvent liquidation is formally known as a Members’ Voluntary Liquidation (MVL). It is a process that enables the directors to appoint a liquidator to formally close down their solvent company when they no longer want it.

In the MVL process the liquidator / Insolvency Practitioner releases all the company’s assets and ensures there are no outstanding liabilities; and the company money is distributed to the shareholders.

An MVL is typically used when you no longer want, or need, your company because:

  • you want to retire
  • you’re taking up an employee role (perhaps because of the changes to the IR35 rules)
  • you’re moving abroad.

The next step for you

We can help you with whichever type of liquidation you’re considering for your company – an MVL or a CVL.

Give us a call for your free and confidential liquidation advice on 0161 907 4044, or email [email protected].

When you appoint us to liquidate your company, you can be assured that you will get a very professional and affordable service.

If you are worried about your business or just want a (free) no obligation chat, contact Clarke Bell on 0161 907 4044 or [email protected] today. Our Licensed Insolvency Practitioners will provide you with the best professional advice for your situation.

For your free expert advice 0161 907 404

Or just enter your details below

Contact Us

  • This field is for validation purposes and should be left unchanged.