CREDITORS VOLUNTARY LIQUIDATION

Creditors pressing, need to act fast? Liquidation doesn’t have to mean the end of your business

Here at Company Insolvency Advice we assist many directors with the Liquidation process helping to remove stress and show there is a way forward for the future

COMMON REASONS FOR A CREDITORS VOLUNTARY LIQUIDATION

  • HMRC problems with VAT, PAYE and Corporation Tax.
  • Loss of market or major customers.
  • Unaffordable redundancy costs.
  • Sudden Illness.
  • Bad debts.
  • Lack of working capital.
  • Increased competition.
  • Unable to afford CBILS payments
  • Cannot pay Bounce Back Loan

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  • SOME CREDITORS VOLUNTARY LIQUIDATION MYTHS DISPELLED

  • If your company goes into liquidation, you can be a director of another limited company (in fact, you can be a director of as many limited companies you want providing you act responsibly).
  • You can make an approach to the Liquidator to buy the company’s assets.
  • You are entitled to a redundancy claim (providing you have worked there long enough) see our director’s redundancy page.
  • A Company Liquidation should not affect your personal credit rating.
  • WHAT IS THE CREDITORS VOLUNTARY LIQUIDATION PROCESS?

If you think that a Creditors Voluntary Liquidation may be the route you need, we will arrange a meeting to discuss the company’s position and all other alternatives with you. Assuming that it is the most appropriate option, the necessary documents have to be completed to get the process underway, obtain valuations and prepare the information to go to all creditors. Following that the members and creditors meeting is then convened.

Choosing who you want to help you with this process is very important to make sure everything is properly dealt with. Call us on 0800 999 0666 for a free, no obligation discussion.
  • SO WHAT SHOULD YOU DO NEXT?

If you think that a Creditors Voluntary Liquidation could be the answer to your company’s problems, then contact Company Insolvency Advice today to discuss the company options you have. All our discussions are confidential and we can give you the advice you need to make the right decision.  We can assess your situation, wherever you are in the country, to discuss all options and look at the structure of the current business. There may be alternatives to Creditors Voluntary Liquidation and with our experience, we may be able to offer alternative solutions.

We will want to be involved in what the next steps are. We know that it is your company and any major change is a big step. All our staff understand these difficult situations and are accessible and helpful to everyone.

  • CAN CREDITORS CLAIM RETENTION OF TITLE TO GOODS?

When you owe money to creditors, you may be concerned about their ability to claim retention of title to goods you have purchased. This can affect the financial position of the company if it enters administration or liquidation, but whether or not this is possible will depend on the nature of your agreement with the creditor in question.

Businesses have the right to sell products but retain the title on these products until payment is made, which means that if you are unable to pay the invoice and your organisation falls into insolvency, the creditor may be entitled to claim retention of title and recover their goods.

A creditor must inform you at the beginning of any trading relationship that they will be entitled to claim retention of title over any unsold goods of theirs that you hold in case you do not pay the creditor’s invoices. As a debtor, it is important to understand this aspect of your contracts with creditors before you begin to trade with them, as this could affect your company’s financial position.

To recover their goods in the event of a liquidation, creditors must identify each item on each unpaid invoice that remains unsold. Often, this is achieved through reference numbers of serial marks left on products that allow the seller to identify them, and products must usually undergo a physical inspection by a liquidator or administrator to identify any that may be subject to retention of title. Once these products have been accounted for, the liquidator or administrator will verify the relevant documents and then return the approved items.

The value of these items will be offset against the amount that the creditor can claim from the insolvent business, which can be beneficial for a company that is facing formal insolvency procedures.

  • WILL LIQUIDATING MY COMPANY AFFECT MY PERSONAL CREDIT RATING?

In most cases, liquidating a company will not affect your personal credit rating, as the business is a distinct legal entity. However, it may have some other effects that you should understand. For example, the information that you were the director of a company that went into liquidation may appear during a personal credit check or search.

This is different if you have given personal guarantees in respect of company debts. In these cases, if the business is insolvent and goes into liquidation, you will be asked to satisfy the debt for which you gave the guarantee. If you cannot make the payments for which you are liable under the personal guarantee, this could affect your personal credit rating.

Some organisations will ask for personal guarantees before trading with your business, whether as a lender, an asset provider or a different type of creditor. You must understand the terms of the guarantee and ensure its legal validity, as there are many different types of arrangements in this regard. It may be useful to seek legal advice to ensure that the terms of a personal guarantee are suitable and to protect your credit rating to the extent possible.

Once you have signed, it is important to keep copies of any paperwork relating to a personal guarantee so that the details can be checked, and to make sure you can review the terms of the agreement you have signed. There are legal requirements for personal guarantees and if these have not been met, a guarantee may be invalid, so this is also crucial to check during any insolvency procedure. 

If you are concerned about your personal credit rating or pressure from a creditor over a personal guarantee, you should take action as soon as possible. The creditor may be in a position to pursue an aggressive debt collection strategy, which could make the difficulty of dealing with insolvency even worse. However, by consulting an expert on this subject and working with Company Insolvency Advice, you may find a route through which you can settle the debt with the creditor, which may also reduce the impact of this situation on your credit rating.

WHO ARE WE

Company Insolvency Advice

Company Insolvency Advice is a leading business rescue, corporate restructuring and insolvency specialists, with years of experience in providing corporate debt solutions. We understand the daily pressure you are under as a director and our team of expert consultants cover the whole of the country in order to discuss debt solutions with company directors.

NATIONWIDE COVERAGE

We cover the whole of the UK

From our office in the North West of England, we provide a national advice service to the whole of England, Scotland and Wales. We aim to offer tailored, high quality service of local business advisors, with the experience, knowledge and support of a huge, national organisation.

OUR EXPERTISE

Why clients choose us

  • Communication

Good communication holds the key to any financial advice for businesses and our remit is to provide clear and accurate debt advice.

  • Experience

Our staff have many years’ experience in dealing with ever-expanding creditor pressure and economic issues that affect companies.

  • Reputation

Company Insolvency Advice prides itself on the reputation it has built up over the years in assisting company directors resolve various financial issues.

“Extremely helpful and very professional service. Knowledgeable and very approachable. Would highly recommend!!”

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