Deciding to liquidate your business because it’s insolvent is a big step and can be a stressful time for company directors.
Liquidating an insolvent company is done via a Creditors’ Voluntary Liquidation (CVL).
A director can propose a CVL if:
- their company can’t pay its debts – i.e. it is ‘insolvent’
- the shareholders agree and pass a ‘winding-up resolution’
You must appoint a Licensed Insolvency Practitioner to complete a CVL, and they will charge a fee for their expertise.
However, there are some companies who advertise “free” liquidations.