Voluntary Liquidation–UK: What you Need to Know
If your business is contemplating UK voluntary liquidation, the UK has specific regulations and guidelines for how a company must proceed with the process. A members’ voluntary liquidation (MVL) is intended for companies that are able to meet their financial obligations but choose to close the business for other reasons. A company that is unable to pay its debts needs to file a creditors’ voluntary liquidation (CVL). This is where the company’s directors place the business into liquidation before creditors can force a court ordered one.
Understanding Your Rights in a Voluntary Liquidation in the UK
Before you take any action, it is important to consult with your solicitor or tax advisor to get professional advice on protecting your interest and the business. You may also want to consider contacting firms that specialize in assisting companies through the liquidation process.
Even though voluntary liquidation should be thought of as a last resort, it can solve a lot of problems for an insolvent company whose liabilities outweigh its assets. Liquidation in the UK allows the opportunity to write off any unsecured business debts that are not personally guaranteed, and can provide the owners a chance for a clean start.
One of the first steps to beginning a voluntary liquidation is for the directors or shareholders to hold a vote and pass a resolution in favor of placing the business in liquidation. The company’s directors will then need to:
Call a meeting with all of the creditors to disclose information regarding the impending liquidation
Appoint a liquidator (Creditors will often appoint one in place of or in addition to the one appointed by the business)
Hand over all of the assets to the care of the liquidator so they may be inventoried and appraised for sale in the liquidation
Provide the liquidator with all financial records, bank statements, and insurance policies
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 recognizable names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency. We invite you to contact us to discover how we can be of assistance in a voluntary liquidation in the UK.