FAQ / Frequently Asked Questions & Help

I am thinking of closing my company, what are my options?

We can talk you through your options via telephone on 0121 201 0399 and give you a free consultation and quote.

Alternatively, you can view some of the options here first:

Creditors Voluntary Liquidation (CVL) – This is usually seen as the only available option to you when your company’s financial position has deteriorated to a point of no return.

Members’ Voluntary Liquidation (MVL) – Our team works with you and assist you to implement this process and will ensure that funds are distributed to creditors and shareholders within a relatively short period of time.

Company Strike Off/Dissolution – If you have a dormant company or one that has come to end with no assets or liabilities, we can help you apply to the Registrar of Companies directly for the company to be dissolved.

 

When does compulsory liquidation occur?

Compulsory liquidation occurs when a company is wound up by an order of the court following a creditor issuing a winding up petition against your company.

The purpose of the order is ensure the company immediately stops trading and for the official receiver to appoint a liquidator who will have a duty to collect the company’s assets and distribute them to its creditors in accordance with the law.

If you are being faced with the threat of a winding up petition, please call us on 0121 201 0399 and one of our team will be more than happy to talk you through your options.

 

 

What is the difference between CVL and compulsory liquidation?

A CVL is a voluntary process initiated by the directors and shareholders of a company having recognised that the company cannot pay its liabilities as they fall due. Choosing to enter into a CVL protects the company from facing compulsory liquidation which ordinarily restricts any form of control or foresight into the company’s closure.

Compulsory liquidation usually commences with a creditor issuing a winding up petition. Further details about how we can help if you are faced with a winding up petition can be found here.

 

What is the difference between a CVL and an MVL?

In short, a solvent company uses the MVL process to close down their business. In contrast, although still voluntarily undertaken, a CVL involves closure of a company that is insolvent.

 

What are the benefits of going through the process of a CVL?

 Swiftly removes creditor pressure.

 Outstanding debts are written off.

 Halts further legal action and prevents further losses.

 Brings an end to worries regarding company debts.

 Provides directors with control and comfort in dealing with their chosen liquidator.

 Allows employees to claim redundancy pay and unpaid wages from the government.

 Provides ability to discuss existing asset purchase.

 Can offer support a business needs to continue trading under a separate legal entity.

 

Can I restart under a similar name?

Yes you can, providing that you follow the correct legal process; otherwise you could face prosecution and personal financial issues in the future.

 

How much does it cost to close a business?

Costs are relatively low but please call us now for a free consultation and quote on 0121 201 0399

 

What happens to the outstanding debts my company owes?

It can be quite stressful for a director to be unable to repay existing debts with no way of getting the company back on its feet. As you cannot continue to trade if you are insolvent, a CVL offers a way of dealing with these outstanding obligations in a process which aims to maximise the return for creditors.

Notwithstanding this, the prospect of a return to creditors is dependent upon the assets available and costs of the process. In general, the liabilities of the company remain with the company (in liquidation) so you will not be held liable for any of the company’s debts.

The caveat to this, of course, is whether you have signed personal guarantees for one of more of the company’s debts.

 

Is there any way of saving my company?

As a director or shareholder of a company experiencing financial issues, it can be extremely difficult to prepare and implement a strategy that will change the fortunes of your business.

At Keystone Recovery we regularly assist business owners and management to explore the different options available.  

 

Can I be personally liable for my company’s debt?

Generally, if you are a director (or acting as a director), you are not personally liable for paying your company’s debts.

However, in a circumstance where you have signed a personal guarantee, you will be liable for the debt if the company cannot meet its requirements.

 

Can you help clear my company’s debt?

One of our team will be more than happy to look at available options for you to write off your company’s debt. This may be through the process of company rescue or company closure.

Get in touch with us on 0121 201 0399 and one of our team will be more than happy to talk you through your options.

 

What is the difference between Creditors Voluntary Liquidation (CVL) and company strike off/dissolution?

The main difference between the two procedures is as follows:

Company strike off/dissolution can be utilised if you have a dormant company or one that has come to an end with no assets or liabilities (thus it is essentially solvent) and an application can be made to the Registrar of Companies directly for the company to be dissolved.

CVL can be utilised if you have a company with or without assets that is essentially unable to pay its creditors and continue trading (thus it is insolvent). In such circumstances you may voluntarily instruct a licensed firm of insolvency practitioners to essentially close the company for you.

Company strike off isn’t best recommended as you may come into various key issues going through this process. Instead, we recommend considering the process of Creditor Voluntary Liquidation (CVL).

 

What is a CVA?

If your limited company has become insolvent, you can use a Company Voluntary Arrangement (CVA) to pay your debt to creditors over a fixed period. If your creditors agree with the payment schedule, your limited company can continue trading.

However, if you don’t meet the agreed payment schedule, any of your creditors can apply for a Winding up Order.

 

How can I save my business?

One of our team will be more than happy to look at available options for you to help save your business from closure. There are a number of options available which we can help with. 

Get in touch with us on 0121 201 0399 and one of our team will be more than happy to talk you through your options.

Comments are closed.

Close Search Window