CREDITORS VOLUNTARY LIQUIDATION IN DETAIL
- All the business staff are laid off and the business premises closed.
- The insolvency practitioner prepares all the legal paperwork for the directors, letters are sent to all the shareholders notifying them of a proposed meeting to pass a resolution making the company go into liquidation.
- Letters are sent to all creditors notifying them of a meeting to consider the resolution to put the company into liquidation and chose the liquidator, as well as how they will get paid.
- The company goes into liquidation during the meetings.
After the shareholders and creditors meetings the liquidator takes control. Their objective is to:
- Realise the assets which usually means selling plant, machinery and vehicles at auction.
- Collect in any book debts.
- Close bank accounts.
- Investigate what happened.
- Ask the directors to fill in questionnaires to help with that investigation.
- File a report to the Department for Business Innovation & Skills within six months on the director’s conduct.
- Write to creditors and agree their claims.
The liquidator will try and pay a return from the assets to creditors. This is called a dividend.
Finally, they will close the case when all matters have been dealt with.
HOW LONG DOES A CREDITORS’ VOLUNTARY LIQUIDATION LAST?
CREDITORS VOLUNTARY LIQUIDATION IS WHERE A BUSINESS CAN NO LONGER BE MADE PROFITABLE OR THE OWNER DOES NOT WISH TO CONTINUE TRADING.