Types of liquidation
Liquidating your business does not necessarily mean you have failed as a business. Many companies find it a tough and challenging struggle to maintain a healthy cash flow.
Many companies find their debts increase due to customers failing to pay invoices or unexpected bills or increased overheads.
In this case, you might consider liquidating your business. You may have heard of liquidating a company; some people call it “winding up a company.”
There are different types of liquidation when a business is insolvent.
A compulsory liquidation is a where a creditor issues a petition through the Court to have the company liquidated. If your business goes into compulsory liquidation then you, as the business owner, will have almost no control over the process.
To prevent Compulsory Liquidation, a Creditors’ Voluntary Liquidation (CVL) could be an option, whereby the director of a company choses to voluntarily end the business and liquidate all of its assets.