If your company cannot pay its suppliers, its landlord or the tax man, a Creditors Voluntary Liquidation (CVL) may be the best option to close down the company if there is no way to rescue the business. A CVL is a formal insolvency procedure to liquidate or ‘wind up’ an insolvent company. A company is insolvent if its liabilities exceed its assets and/or it cannot pay its debts when they are due and there is no prospect of the company continuing to trade.
A CVL is commenced on a voluntary basis by the directors of the company, rather than waiting for the Court to order that a company is wound up. In a CVL, a Liquidator is appointed to sell any assets with a view to paying a dividend to creditors where possible.
Contrary to popular belief, it is not ‘illegal’ for a company to trade whilst it is insolvent, however the directors run the risk of being criticised in future if they do not act properly when their company is insolvent.
Right for your business?
Graywoods offers specialist Company Liquidation services, including acting as Liquidator and dealing with all the necessary formalities. If you feel your company cannot continue to trade without worsening the position of its creditors then you should take advice urgently about whether a CVL is the best route for your company and to explore any other options that may be available.
Call us today on 0114 285 9500 for a free and confidential discussion of the options for your company.