Corporate Debt Solutions
Creditors Voluntary Liquidation (CVL)
Company can not meet its liabilities
Initiated by Directors & Shareholders
Immediate stress relief as Proposed Liquidator assists from day one
Low Cost Fixed Fees
Options for Employees
Legal Action is halted
Debts are written off
When a company is facing financial problems and there is no reasonable prospect of rescuing the Company, then the procedure that would best suit a ‘shut up shop’ option is that of a CVL. This is the most common liquidation procedure in the UK.
A CVL is initiated by the directors of the Company and involves the shareholders placing the Company into Liquidation and appointing a Liquidator. The Liquidator is able to act quickly in this procedure and take control of the situation on behalf of the Company.
Once we are instructed in respect of the CVL, the entire process is handled by us, all creditors are to liaise with us and this will immediately alleviate the stress that comes with dealing with creditor pressure.
As a CVL is initiated by the directors and shareholders of the Company, a certain degree of control is retained and can avoid the Company entering into Compulsory Winding Up if a creditor is or has issued a Winding up Petition.
There are many more advantages to CVL, including options for employees to claim their unpaid wages, holiday pay, redundancy and loss of notice through the Government Scheme, options to purchase back assets of the Company if required and can give directors and shareholders the opportunity to continue forward with new business ventures without the strangling debt of the Liquidated Company.
To discuss this option or any others in more detail please contact one of our team for a same day consultation on 0113 5323278 or email email@example.com and one of our team will be happy to assist.
Minimal Control of directors
Can be much more expensive than CVL
A Compulsory Liquidation is ordered by the Court, usually on the petition of a creditor but it can be on behalf of the company or a shareholder. An Official Receiver (OR) immediately takes control of all aspects of your company. The OR is not an independent Insolvency Practitioner they are a government body.
A Compulsory Liquidation can only ensue following the procedure set out in order to issue a Winding Up Petition. No doubt the Company will have been under significant financial pressure for some time, the issuing of a Winding Up Petition is the most serious action a creditor can take.
If your Company is receiving significant pressure from creditors, particularly statutory demands or threats of Winding Up, then you must act quickly as time is of the essence. Should a Petition be served, then the options available to the Company significantly reduce.
We can still assist if your Company has been issued with a Statutory Demand or Winding Up Petition, but you must act quickly if you wish to try and avoid the Compulsory Liquidation. As the name suggests, control is completely taken away from the directors with regards to the appointment of the Liquidator. Of all formal insolvency proceedings, Compulsory Liquidator is arguably the most invasive of procedures.
Should the Company be viable we can look at securing a Company Voluntary Arrangement (CVA) or Admnistration (ADM) for your Company. For more information on CVA or ADM, please see Rescue options above.
Should you need any advice in respect of Compulsory Winding up then please contact one of our team on 0113 5323278 or email firstname.lastname@example.org and one of our team will be happy to help.
Avoids formal insolvency procedure
Strict criteria must be met
Risk of restoration for up to 20 years
A Company may be dissolved from the register by means of Voluntary Dissolution, however, certain strict criteria must be met in order to do so. Should the Company have liabilities at the date of proposed dissolution then there is a risk that a creditor of the Company may request that the Company be restored to the register for as much as 20 years from dissolution in some cases.
In order to dissolve the Company there are strict guidelines on trading periods, notices given to certain parties of the intention to strike off etc.
Alternatively, if you are wishing to restore a Company to the Register then the process can be a bit daunting and we can assist you with this.
Should you think that dissolution may be an option for your company or want to discuss assistance with a restoration then we can assist. Please call a member of our team on 0113 5323278 or email email@example.com and one of our team will be happy to help.
Procedure to rescue the business as a going concern, if possible
Fast appointment of Administrators achievable
Protection from creditor legal action
Saving employee jobs, reducing preferential creditors
Buy back option of the business and assets
Administration debts are written off
ADM is a formal insolvency procedure, however, the principle aim of ADM is to rescue the Company as a going concern, if possible. A licenced Insolvency Practitioner is to be appointed, and Smith & Barnes are able to appoint one of their licenced Insolvency Practitioners.
There are numerous advantages to ADM, should it be believed that one of the statutory purposes can be achieved.
There are various routes into ADM however if a Winding Up Petition has been issued by a creditor then Directors are not able to make the appointment of an Administrator. This does not necessarily mean that an ADM is not possible via other means, however, if your Company is facing creditor pressure and ADM is viable then quick action is needed to ensure that this is an option available to the directors.
A form of ADM can also be known as a Pre-Pack Administration, which ultimately means that a sale of the business and assets is negotiated prior to the Company entering into ADM. The benefits of this can include the continuation of business and avoiding redundancy of staff. A sale of the business is effective immediately upon entering ADM. This results in the smooth continuation of the business immediately upon ADM. The current directors, or management, can purchase the business and assets should their offer be in line with market value and the offer is the best put forward to the Administrators. The sale consideration is retained by the Administrator and the funds are utilised and paid in line with Insolvency Legislation.
If would like to discuss ADM further then please call one of our team on 0113 5323278 or email firstname.lastname@example.org and we will be pleased to assist.
Company Voluntary Arrangement (CVA)
A CVA is a formal agreement between the Company and its creditors. The agreement is bespoke to the Company and can be made up of a variance of factors that are put forward by the Company.
Creditors have to be in agreement to the proposals put forward and vote on the terms of the arrangement accordingly. Should 75% of those creditors voting be in agreement, then the arrangement is implemented accordingly. It should be noted that at lease 50% of the shareholders also need to be in agreement to this process.
The Company liabilities at the date of the approval of the CVA are ring fenced and those creditors, and the Company are bound by its terms.
A CVA allows the Company to continue to trade with contributions being paid to the CVA Supervisor in line with the agreed proposals usually via on going trading profits. It may also be agreed that the Settlement terms are by means of a one of full and final payment that is made into the arrangement within a certain period of time.
A CVA is flexible and specific to the Company and creditors involved. The Supervisor, who must be a licenced Insolvency Practitioner and agree to act, will ensure that the terms of the CVA are adhered to by all parties until successful completion is achieved.
If you would like to discuss CVA further then please call one of our team on 0113 5323278 or email email@example.com and we will be pleased to assist.