A Guide to Limited Company Bankruptcy – Company Debt Advice Guide
Having struggled to build their commercial enterprise up from the ground, it’s perfectly understandable that owners may be reluctant to make difficult decisions about insolvency. Facing the prospect of bankruptcy is never going to be easy for any company owner, but the key is to find out your options fast before your financial position gets worse.
The problem for many business specialists is that they’re so tied up with the daily workings of the company, and the stresses associated with it, that they may not even realise how close their organisation is to financial meltdown. Continuing to trade when your business is insolvent can have severe repercussions, so insolvency advice should be sought as soon as possible.
And that’s where we come in. Our experienced, knowledgeable staff will help you find the insolvency practitioners best placed to guide you through your particular financial difficulties.
By taking the insolvency option, company owners may be able to:
Company Liquidation – CVL – Company Bankruptcy
Liquidation is a way of dealing with corporate debts that you cannot pay when they become due. However, not all companies which go into liquidation are insolvent – some can afford to pay all their debts with their assets. Liquidation is also known as “winding up” a company.
When a company is liquidated it is brought to an end, stops trading and ceases to exist. Any assets and property of the company are redistributed to creditors.
Remember: Not all companies in liquidation are insolvent.
Once your company is in liquidation, its creditors cannot take any further action against you.
Types of liquidation
There are three types of liquidation
Members’ voluntary liquidation
Creditors’ voluntary liquidation
Converting a members’ voluntary liquidation to a creditors’ voluntary liquidation
The Liquidator can have a members’ voluntary liquidation converted to a creditors’ voluntary liquidation if they decide the company will not be able to pay its debts in full within 12 months from the start of liquidation.
The Liquidator calls a meeting of the creditors and the members’ voluntary liquidation becomes a creditors’ voluntary liquidation from the date of the meeting.
The court may also order the company to be wound up on the petition of:
The Liquidator is appointed to wind up the company’s affairs. The liquidator does this by calling in all the company’s assets and distributing them to its creditors. If anything is left over, the liquidator distributes it among the members of the company.
Unless the court directs other arrangements, the liquidator must publish a notice of appointment in the Gazette. If the liquidation is voluntary, the liquidator must also give notice in a newspaper in the area where the company has its principal place of business.
In all liquidation cases, Liquidator must also notify the Companies House Registrar. In compulsory liquidations, the petition itself is not presented to the Registrar so it will not appear on the public records.
In a compulsory Liquidation, the Liquidator has a duty to send a report to the Government on the conduct of all directors who were in office in the last three years of the company’s trading. The report is sent to the Secretary of State for Business, Innovation & Skills, who then has to decide whether it is in the public interest to seek a disqualification order against a director.
During the liquidation process
If your company is insolvent, the accounting date is reset to start a new accounting period at the date the Insolvency Practitioner is appointed.
Ending the liquidation process
Although liquidation isn’t always the right option, there are many cases in which it is the most sensible course of action. Therefore, it needs to be considered as a possibility, but only with the advice and support of experienced finance professionals who will be able to guide you through the whole process from beginning to end.
We are able to offer fully independent advice that isn’t tied to any finance house, so you can be sure of receiving objective guidance you need at this particularly difficult time. And as you might expect from a leading finance broker, our service is completely confidential. One phone call to us is all you need to begin to lift the weight of business insolvency from your shoulders.
Engage the insolvency experts now
Our advice will be based on an analysis of your existing liabilities and an assessment of your current and future income. By establishing the facts about the current state of your business, we will then be able to make informed decisions about the best options that are open to you.
If your company is facing immediate difficulties which threaten its very existence, or if you’re simply concerned about current trends that are affecting its balance sheet, you speaking to us makes sense. Our specialists will be on hand to offer in-depth advice based on extensive experience and a thorough knowledge of the world of finance, including factoring and commercial lending.