The insolvent liquidation (or winding-up) of a company is not a situation any business owner wants to face, but sometimes it is the best or only option available. When the time comes to bring a company’s business to an end, the right legal guidance can help to make the process less painful, ensure you meet your legal obligations and allow you to exit on the best terms possible.
Isadore Goldman has a reputation as the go-to experts for company liquidation, especially where there are complex issues that need to be carefully navigated. With many years of specialist experience to draw upon, we guide our clients through the decision-making procedure, ensuring they take the correct actions promptly in all types of liquidation scenarios.
Where there is the possibility of saving your company, we can also assist with a range of restructuring and business rescue options.
Our liquidation solicitors can help with matters including:
- Winding-up petitions and compulsory liquidation
- Members’ Voluntary Liquidation (‘MVL’)
- Creditors’ Voluntary Liquidation (‘CVL’)
- Dealing with Insolvency Practitioners
- The collection of all available assets
- The sale of assets
- The distribution of assets to creditors
- The dissolution of the company (including removing it from the register of companies)
We understand what a difficult time this is, but with our experience, specialist expertise and flexible approach, we can help to ensure you achieve the best available outcome, no matter how challenging the situation you are facing.
Why choose us?
Independently recognised expertise
Expertise in a wide range of company liquidation scenarios
Every company liquidation is unique. However, our team have decades of combined experience, meaning no matter how complex or niche the issues you are facing, we have almost certainly encountered them before and will know exactly what needs to happen.
Clear, realistic advice you can trust
Dealing with a potential liquidation can be very overwhelming and stressful. We are here to provide plain English advice on the issues you are dealing with and your options for moving forward. This includes transparency on the likely costs involved, including our fees.
Additional business legal services to meet all of your needs
Our sister business Isadores [hyperlink] is a modern commercial practice servicing a diverse range of business sectors. Their added expertise can be particularly valuable where a liquidation involves complex property or corporate transactions.
What is liquidation?
Whether you are considering a voluntary liquidation or are on the receiving end of a winding-up petition, we can walk you through all of the steps you need to take, providing clear, confident advice and close personal support at every stage. There are three types of company liquidation.
Compulsory liquidation and winding up petitions
There are a number of circumstances in which a company can be wound up by the court. A creditor’s winding-up petition is a way for a creditor, or creditors of a company, to trigger its liquidation by the court as a last resort, in a final attempt to recoup money owed to them. This is only possible if the company is unable to pay its debts.
The winding-up petition will set out the debt owed by the company to the creditor issuing the petition (the ‘petitioning creditor’). There will be a court hearing to decide whether the company should be wound up. If the company disputes the debt or has a genuine and substantial claim against the petitioning creditor, it will have the opportunity to make its case at the hearing.
The petition must be advertised before the hearing so that anyone else owed money by the company is aware of the situation. They will then be able to make their own representations to the court at the hearing, as can the company’s shareholders.
The court decides what order to make at the hearing of the winding-up petition. If the court decides to make a winding-up order, this is known as a compulsory liquidation and a liquidator will be appointed to collect and distribute the company’s assets to its creditors. The liquidator will also report on the conduct of the company’s directors to the Secretary of State, who will consider whether to take disqualification proceedings against them. The company’s officers are legally required to cooperate with the liquidator.
Our liquidation solicitors can assist companies with matters including:
- Opposing a winding-up petition
- Representation at winding-up hearings
- Negotiating with creditors to find an alternative to winding-up
- Guiding business owners and directors through the liquidation process if a winding-up order is made
Members’ Voluntary Liquidation (‘MVL’)
A Members’ Voluntary Liquidation (‘MVL’) is a form of voluntary liquidation where a company’s shareholders agree to end its business. An MVL will only be an option if the company is solvent, able to pay all of its creditors (including HMRC) in full, and meet all of its contractual obligations.
For an MVL to be possible, the directors of the company will need to make a sworn statement confirming that the company will be able to pay its debts in full, together with interest, within a period not exceeding 12 months. The company’s shareholders will then need to pass resolutions resolving to wind-up the company, and appoint a liquidator to collect and distribute the company’s assets to its creditors, including any surplus to the shareholders.
MVL’s are typically used where a company is not in financial distress, but the directors and shareholders have decided the time is right for the company’s business to come to an end. It can offer a tax efficient method of withdrawing assets from the company, and a way to distribute distinct assets to the company’s shareholders.
Our company liquidation solicitors can advise on and assist with matters including:
- Company directors’ statutory declarations of solvency
- Shareholders’ resolutions
- The appointment of liquidators
- Notifications to creditors
- Fulfilling a company’s contractual obligations
- The sale and distribution of a company’s assets
- Dissolving a company
Creditors’ Voluntary Liquidation (‘CVL’)
A Creditors’ Voluntary Liquidation (‘CVL’) can be used where a company is insolvent (i.e. unable to pay its debts) and its directors and shareholders agree that winding-up the company is the best course of action.
To start a CVL, the directors of the company will need to call a meeting of its shareholders and ask them to vote on winding-up the company. The shareholders will need to pass a ‘winding-up resolution’, which will require the agreement of shareholders holding at least 75% of the company’s shares.
The shareholders will also nominate an Insolvency Practitioner to act as the company’s liquidator. The company’s creditors may then approve the shareholders’ nomination or appoint a different insolvency practitioner to act as liquidator. If the creditors’ choice of liquidator is different to that of the shareholders, the creditors’ choice prevails.
The company’s directors must prepare and provide its creditors with a statement of the company’s financial position (‘statement of affairs’), notify Companies House of the winding-up resolution, and advertise the resolution in The Gazette. The company’s directors are legally required to cooperate with the liquidator.
The liquidator’s role is to ensure all of the company’s assets are realised. Any funds raised are to be used to pay the costs and expenses of the liquidation, and creditors in the statutory order of priority.
Our company liquidation solicitors can assist with matters including:
- Winding-up resolutions
- The appointment of liquidators
- Preparing statements of affairs
- The requirement to notify Companies House and advertise winding-up resolutions
- Advice on working with Insolvency Practitioners