Many companies are
finding themselves unable to pay their liabilities as and when they
fall due. Alternatively on analysis they find that their assets are
less than their liabilities. These are two classic definitions of insolvency,
and any Director who finds that his company is in this position will
need to take advice. Failure to do so may result in an action for wrongful
trading at some stage in the future. For many directors who ask themselves
'How do I wind up my company' the solution may be to liquidate the company
and start again. The favoured way to do this is via a Creditors Voluntary
A Creditors Voluntary
Liquidation is very common, quick and a very powerful way to close a
business and deal with everything properly. The comapny is closed and
you can get on with any new business quickly. Any leases are cancelled
and the staff made redundant. It is a relatively cheap and timely way
of doing things and is thus, for many, the favoured route.
So how do you wind
up my company from a liquidator's point of view? Well, the liquidator's
job is to call a meeting of creditors and prepare a statement of affairs.
The creditors, on attending the meeting, will vote on whether to place
the company into liquidation or to go some other route. If liquidation
is chosen then the liquidator implements this and investigates the conduct
of the directors immediately prior to the liquidation. He also collects
assets and turns them into cash.
It is often the
case that the only people interested in acquiring any assets are the
old (or original) directors, and so these can be sold on quickly and
cheaply to them. The liquidator then works out the debts and pays the
creditors from the remaining assets, if there are any. This allows the
company's directors a fresh start, completely debt free. Often the directors
are able to be running a new company as the old closes down. It is possible
to 'pre-pack' a liquidation so that this change is completely seamless.
If you would like
to talk about how to wind up your company to a specialist with 17 years
corporate insolvency experience then enter your details into the web
form below for a no-obligation chat.
if you need help with personal debt (rather than business related debt)
go to our free debt
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