Voluntary Liquidation - a brief guide
If you think that your company is in trouble then you may need to speak to someone who is able to advise you on the effects of voluntary liquidation. It is often also called creditors voluntary liquidation or CVL, as it involves the creditors, at a meeting, voting that the company should go into liquidation.
It could be seen that a voluntary liquidation is the end of a business, and indeed it is often known as a burial process. An experienced insolvency practitioner will look at matters slightly differently however, in that they can often see the closing of one company, as an opportunity to save a business whilst closing a loss performing shell.
It is now a common occurrence for a pre-pack sale of the business to be considered if at all possible. This has the effect preserving assts and jobs, which in the light of this country's current economic difficulties, will be important.
The process of a CVL is quite straight forward. A statement of affairs is prepared, and circulated to creditors. They are invited to a meeting, where it will be proposed that the company is liquidated and a liquidator appointed. Notice of this meeting must be at least two weeks. Very often now, creditors simply do not attend. They may send a proof of debt and a proxy voting form by post or fax prior to the meeting. Large creditors with good connections may be able to get a representative from a large accountant to come to the meting. This 'meeting man' will ask pertinent questions of the directors as to why the business has failed, but this is really all for effect, as the closing of the business will be a formality.
If the assets of the business have been pre-sold, an explanation of why will be given.
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Steve is a qualified solicitor who has chosen to work outside the usual legal practice to be able to offer cost effective solutions for businesses and companies in need. Read more at Http://steves-debt.blogspot.com Visit http://www.helpwithdebtuk.com
