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If it has not done so already, the business almost always ceases to trade. The Liquidator, who has various statutory powers enabling them to wind the company down, will then take control of the company’s affairs.

The Liquidator will first instruct agents to value and price the Company’s assets. Once this has been done, the Liquidator will then sell the assets for the best value achievable in the circumstances.

There is an order of priorities that the funds retrieved will be used to pay. These are set out as follows: -The cost of the liquidation -Secured/preferential creditors -Unsecured creditors

In most cases, the Company’s employees will be made redundant. Through the National Insurance Fund, employees are able to claim redundancy pay and other entitlements, whereby the Liquidator will assist in the submission of these claims. If a sale of the Business is able to be concluded by the Liquidator on a going concern basis, it is possible for employees to be transferred to the purchasing entity.

Having a duty to investigate the company’s prior affairs, the Liquidator will provide a report to the Insolvency Service with their findings. Once reviewed, the Insolvency Service will then consider disqualification proceedings. If necessary, the Liquidator also has the power to attempt to recover assets from parties to certain transactions prior to Liquidation.

As quickly as possible! As part of their report to the Insolvency Service, the Liquidator will take into consideration how quickly the Directors acted in obtaining advice. There may be accusations of wrongful trading if the Directors continued to trade whilst knowing the Company was insolvent.

Provided their offer is acceptable to the Liquidator based upon market value and this option is the best outcome for the company’s creditors, then the Directors (or shareholders) can purchase the company’s assets. Using an independent valuation agent, any offer received should be considered the best achievable within the circumstances. Although they must meet certain conditions if they want to trade with the same or similar name, the Directors can trade again in the same or similar line of business.

The answer to this varies depending on individual circumstances. 12 months may be long enough, however for reasons such as asset sales or distributions to be made to creditors, then a liquidation may take longer.

When all issues relating to the winding up of a company’s affairs have been dealt with, the Liquidation will end. A final report will be sent to the Creditors from the Liquidator. After a period of 8 weeks, this final report will be logged with Companies house and (usually) 3 months later, the company will be officially dissolved.

An MVL is a liquidation process available to solvent companies, enabling the shareholder/s to appoint a liquidator to formally close down their company. Closing your company through an MVL process allows your company assets to be transferred to you by way of capital distribution and thus be potentially eligible for Business Asset Disposal Relief (formerly Entrepreneurs’ Tax Relief). This is a generous allowance whereby you are taxed at 10% on the entirety of the company assets, potentially saving you £1000s

As long as the company you are looking to close is solvent and has over £25,000 in net assets once all liabilities have been paid and has been trading for longer than 24 months, an MVL is probably the right route for you. Fill in the form now to speak to an expert