Creditors Voluntary Liquidation Process
Our 6 Steps to a Creditors Voluntary Liquidation
1. It should always be remembered that the decision to commence the Creditors Voluntary Liquidation Procedure should only be taken once advice has been received to consider all options for the company.
2. At Liquidation.co.uk we can offer such advice and as Licensed Insolvency Practitioners are able to deliver all formal company options. It is important that you have been made aware of all of the options available to you. Liquidation.co.uk will prepare all the necessary paperwork to convene and minute all meetings required.
3. The first step to start the formal Creditors Voluntary Liquidation Procedure is to hold a meeting of the company Directors who meet to agree that the company is insolvent and that they wish to see the company proceed into Creditors Voluntary Liquidation.
4. The directors also agree to convene meetings of shareholders and creditors in order to resolve to place the company into liquidation. It is normal for the company to then cease trading, with the company’s employees being dismissed.
5. Liquidation.co.uk will assist with employee matters ensuring that any claims that the employees may have against the Government Redundancy Payments Office are dealt with.
Liquidation.co.uk will also deal with calls from creditors of the company from the point at which they are formally requested to act on the company’s behalf with regard to the Creditors Voluntary Liquidation of the Company.
6. Once appointed by members and then creditors, the liquidator has three main duties:
- i. To realise the company’s assets
- ii. To agree the claims of the company’s creditors
- iii. To investigate the company’s affairs and the directors conduct.
A Creditors Voluntary Liquidation is appropriate when:
- The company is insolvent
- The company does not appear to be viable even if restructured
- The directors don’t feel they have the determination or funding needed to rescue the company
A company is generally recognised as insolvent when it is unable to pay those who it owes money to when that money is due for payment. A worsening of this position over time is a clear indicator of insolvency.