This is the most common form of liquidation and brings to an end the operation of the Limited company or LLP.
Often when a business is insolvent, and does not have enough money to pay its debts as they fall due, the only appropriate course of action is to place the company into liquidation. This is because it is in the interests of the directors to take action at an early stage in order to minimise the risk of personal liability for wrongful trading.
The costs associated with placing a company into CVL are in most cases paid from the realisation of the company's assets.
We can advise and assist directors to ensure they meet their obligations should their company become insolvent, assist in placing the company into liquidation and act as liquidators (albeit the majority of creditors have the ultimate right to decide who acts as liquidator). The liquidator takes control of the company and liaises with lenders, landlords, creditors and staff through this period.
Directors of an insolvent company should also seek professional advice as early as possible to safeguard against potential legal actions against them under the provisions of the insolvency legislation.