Insolvent businesses

Insolvent businesses

If your business is no longer solvent, there are two main options available to you:

Creditors Voluntary Liquidation (CVL)

This allows the directors to (as the term suggests - “voluntarily”) close the company by placing it into liquidation, often after receiving threats from creditors, with the advantage of controlling the timing to plan for redundancies et cetera, with creditors also being keen for the company to go into liquidation. 

This process potentially allows a larger dividend to unsecured creditors compared with compulsory litigation. This is different from Members Voluntary Liquidation (MVL) which is a process used for solvent companies.

We can provide you with advice on whether this is the right option for your business and guide you through each stage of the process.

Compulsory Liquidation

This is a process whereby the creditors are owed more than £730 and force the company into liquidation against the wishes of the directors.  The creditors file a winding up petition at court which has the draconian effect of freezing the company's bank accounts.

We can advise you on the winding up process, arrange a Company Voluntary Arrangement (CVA) if it is a suitable alternative, provide you with advice on how best to settle debts, and assist with negotiating with creditors.
More information for insolvent businesses
Insolvency changes

Please call or email us for a free initial confidential discussion

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