Creditors Voluntary Liquidation
A voluntary liquidation is an alternative to a compulsory winding up order before the Court. A Creditors Voluntary Liquidation is generally reserved for insolvent companies.
A liquidation in practice brings the company to the end of its trading life, and involves the realisation of the company’s assets in order to pay creditors as much as possible.
Where a company is insolvent, the directors and shareholders can take steps to place a company into Creditors Voluntary Liquidation in order to bring the company to the end of its natural life. Once it is known that a company is insolvent Directors ought not to continue trading, to avoid potential proceedings that may be brought by a subsequently appointed Liquidator.
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