Frequently Asked Questions

Browse below for answers to commonly asked questions

Browse all FAQs

  • What is a CVL or MVL? What is the difference?

    A CVL is a Creditors Voluntary Liquidation and an MVL is a Members Voluntary Liquidation.

    A CVL is where the company is insolvent and can not repay its creditors. The directors insitgae the process, but the creditors approve it.

    An MVL is where there is a solvent company, The shareholders (also known as members) wish to extract the remaining value in the company in the most tax efficient way and formally wind up the company. It is often used when a business comes to its natural end of life and where a particular project has ended for which the company was originally formed.

    LiquidateMyBusiness.com offers both CVLs and MVLs at great prices and service. Get a low-cost quote now to being the process.

  • What is the liquidation process (CVL)?

    The liquidation process is summarised as follows;

    1.The directors pass a resolution to liquidate the company / wind-up the company and call a shareholders meeting (usually at a minimum of 14 days’ notice, but this can be shortened with agreement of 90% of the shareholders). The company will usually cease to trade at this point.

    2. A report is provided to creditors outlining the events leading to the insolvency of the company and providing a Statement of Affairs (effectively as balance sheet, showing the assets and liabilities of the company).

    3. A virtual creditors’ meeting is also called (usually a telephone call to be held straight after the shareholders’ meeting) to approve the resolution to wind-up the company and ratify the appointment of a liquidator.

    4. When the liquidator is appointed, the powers of the directors cease immediately.

    5. The liquidator will seek to sell the company’s assets, if any, for the benefit of the liquidation.

    6. After payment of the costs of the liquidation, any remaining funds are distributed to the creditors of the company, whose claims have been agreed by the liquidator.

    7. Upon completion of the liquidation process and having finalised all their statutory duties, the liquidator will issue their final report and close the liquidation.

    8. The company will be dissolved a few months later and removed from the Register at Companies House.

  • What is the liquidation process (MVL)?

    The MVL liquidation process is summarised as follows;

    1.The directors pass a resolution to liquidate the company / wind-up the company and call a shareholders meeting (at a minimum of 14 days’ notice, but this can be shortened with agreement of 90% of the shareholders). The company will usually cease to trade at this point if it hasn’t already.

    2. The Directors swear a Declaration of Solvency in front of a solicitor (effectively as balance sheet, showing the assets and liabilities of the company).

    3. A members’ meeting is called to approve the resolution to wind-up the company and appoint a liquidator.

    4. When the liquidator is appointed, the powers of the directors cease immediately.

    5. The liquidator will seek to sell the company’s assets, if any, for the benefit of the liquidation estate.

    6. After payment of the costs of the liquidation and remaining creditors (including any final Corporation Tax due), any remaining funds are distributed to the members of the company, who have provided signed indemnities.

    7. Upon completion of the liquidation process and having finalised all their statutory duties, the liquidator will issue their final account and close the liquidation.

    8. The company will be dissolved 3 months later and removed from the Register at Companies House.

  • How much does liquidation cost?

    The cost of liquidation will depend on a number of factors, including the level of the assets, liabilities and employee redundancies, if any. Our fees are one of the lowest in the UK and start from as little as £1,750 including disbursements, plus VAT. This compares to the average of over £5,000 plus VAT charged by other firms. This is thanks to our great streamlined processes and online system.

    Use our really quick online quote system to find out now. If the level of assets allow, our fees can be paid out of the company’s assets and not by you personally.

  • Can I still be a director of another company?

    The simple answer is yes, but you must be aware of the following automatic restriction in a CVL. Under Section 216 of the Insolvency Act 1986, the officers are barred from acting as a director or in the formation, promotion or management of another business with a name or trading style so similar as to that of the liquidated company, as to imply association, for 5 years.

    The purpose of the provision is to ensure unscrupulous persons do not open consecutive businesses and benefit from ongoing goodwill at the expense of creditors. It also helps prevent creditors mistakenly providing credit facilities to a new business, in the belief it is an established Company.

    There are provisions, however, to overcome the above restriction and allow you to use the same or similar name. Please contact us to find out more.

  • What will happen to the employees?

    If the employees are not transferred to another business, all employees will be made redundant upon liquidation – this includes employed directors. They will be provided with details of how to claim the monies due to them from the Redundancy Payments Office, a government department. A claim is made directly online with the National Insurance Fund who will make the payments.

    Contact us now to find out more and see how much you could be entitled to!

    See https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you for more information.

  • What if I have received a winding up petition?

    If you have received a Petition, it is not too late to voluntarily wind up your company. The creditor who issued the Petition may be willing to allow you to place the company into a voluntary liquidation, saving their own legal fees and avoiding the additional costs associated with a compulsory winding up process through the courts, which inevitably leads to a lower return to the creditors. Contact us now to speak to a Licensed Insolvency Practitioner for guidance.

  • How do I know if my company is insolvent?

    If your business fits into any of the following scenarios, then your business is legally insolvent – the first 2 are the most common;

    1. Cashflow – you are unable to pay your debts as they fall die for payment;

    2. Balance Sheet – your liabilities are greater than your assets;

    3. Judgement – you have failed to satisfy a judgement against the company

    4. Statutory Demand- you have failed to pay the sum due from a Statutory Demand (for over £750)

  • How are payments processed on the website?

    All payments are processed securely through third-party processor Stripe. We do not hold any of your payment details. You will receive a receipt by email for any payments made. Alternatively, you can pay using your card over the phone. Call us on 0330 1271 899.

  • LiquidateMyBusiness.com – more

    LiquidateMyBusiness.com is dedicated to providing you with a quick and easy way to obtain a very low-cost quote for liquidating your company voluntarily. Our Insolvency Practitioners are fully licensed with the Insolvency Practitioners Association (IPA) and are members of R3, The Association of Business Recovery Professionals. They have many years’ experience in helping companies through the liquidation process – all sizes and industries.

    Due to our processes and online system, we able able to offer such low prices. Go and get a quote now to start your liquidation process.

START YOUR QUOTE NOW

Start Now