UK Liquidation – Understanding Your Rights
The UK liquidation process can be complicated and great care should be taken to ensure your company is properly prepared with all of the facts beforehand. You need to be aware of your rights as well as your responsibilities. There are basically two different types of liquidation. A voluntary liquidation can be either a members’ voluntary liquidation (MVL) or a creditors’ voluntary liquidation (CLV). The second type of liquidation is a forced, compulsory liquidation, which is court ordered. Whatever the circumstances of your liquidation, talking the specifics over with your solicitor or tax advisor is a good first step.
Tips to Help You through a UK Liquidation
How you proceed depends on the type of liquidation you are going through. With most UK liquidations, a qualified insolvency practitioner will be appointed as the liquidator. A members’ voluntary liquidation is the process where a company is still able to pay its bills but chooses to close its doors for reasons such as a lessening relevancy or an owner wishing to retire. A creditors’ voluntary liquidation is a case where the business is not able to pay its bills and is voluntarily placing the company in liquidation with the intention of selling off assets to pay creditors.
A compulsory liquidation occurs when creditors petition the court to force a company into liquidation in order to recover funds that are owed to them. Under these terms, an Official Liquidator is appointed to take charge of the process. This is why it is generally a better option to place your company into a CVL before the court takes such steps. Keep in mind that in the UK liquidation process you will have to:
Meet with creditors and reach an agreement regarding the outstanding debt.
Inventory and appraise the company’s assets. (A third party asset recovery and disposition company may be used for their expertise in quickly and efficiently selling assets to realize maximum value.)
Cease functioning as a business and put a stop to contracts and promises made with other businesses.
Settle up with current and past employees.
Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets. Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency. Contact us to learn how our expertise can assist your company through the UK liquidation process.