Liquidation

There are three types of liquidation which we handle as follows :

» Members Voluntary Liquidation (MVL)

» Creditors Voluntary Liquidation (CVL)

» Compulsory Liquidation

A MVL involves a company which is solvent and is able to pay all of its debts in full, together with statutory interest, within a period not exceeding 12 months, often with surplus assets being returned to shareholders as a capital distribution. The other two types deal with insolvent companies.

Procedure

A company is placed into voluntary liquidation by the passing of a special resolution at a general meeting of the members. The creditors in an insolvent liquidation get the opportunity to appoint their own liquidator if they so wish and meet the criteria.

The duty of a liquidator in each case is to collect in the assets of the company and distribute them equally amongst the creditors.

A company is placed into compulsory liquidation by the court making a winding up order. Among the persons who can petition the court for a winding up order are:  a creditor, a shareholder, the directors, the company itself and the secretary of state.

Practical

A liquidator in an insolvent liquidation has a duty to investigate the affairs of the company and also has to report to the Department of Business, Energy and Industrial Strategy (BEIS) on the conduct of the directors prior to liquidation. The BEIS may then decide to take action to disqualify the directors, either by an order of the court or an undertaking by the directors.  The disqualification can last for a period of between 2 and 15 years.  During this period the individual is prohibited from acting as a director or being involved with the management of a limited company.

Liquidators have many powers, some of which are as follows :

» Reverse transactions which transfer assets at an undervalue.

» Reverse a preference payment to a creditor.

» Take action to make the director personally liable for the company’s debts.

» Order any person to provide information relating to the company’s affairs.

The Enterprise Act 2002 also introduced a prescribed part for unsecured creditors in an liquidation.  This is where a proportion of any realisations to be distributed to a holder of a floating charge is reserved and distributed to unsecured creditors.  This applies to administrations as well and is calculated on the net property available for distribution as follows;

50% of £10,000
20% of the balance, up to a maximum of £800,000

HM Revenue and Customs has, with effect from 1 December 2020, regained a partial preferential status in all formal insolvencies in respect to taxes paid by employees and customers which the insolvent business was temporarily holding, giving rise to secondary preferential status.

For more information and/or for a free initial meeting and confidential advice without obligation, please call 01582 469700.

'I´m sure that you don´t get many clients saying that they hope to get the opportunity to work with you again in the future but, in any case, many thanks for taking care of this extremely tedious process for us.'

Company Director

'Thank you so much for your outstanding assistance and tenacity in seeing this matter to conclusion.
I almost wish I still ran my property company so I could employ you. I sincerely hope Maidement Judd appreciate you.
Kind Regards'

Company Director

'Just to say 'thank you' for all your support & ongoing help with my company, I really do appreciate your personal approach & empathy.'

Company Director

'Your team has made a hard situation more tolerable by their thoughtfulness and consideration. Thank you for all your help, care & support over the last few months'

Company Director

'Can I say how very professional and helpful you have been throughout this entire episode and you deserve credit for keeping us informed of progress through this difficult period'

Company Director

'Thanks so much for all your advice and help'

Maidment Judd Potential Client

'I am extremely grateful for your time and advice and would like to thank you for your consideration of all that was discussed.'

Maidment Judd Potential Client

'Thank you for all your help and advice this year in what was a difficult time for me and my family'

Maidment Judd Potential Client

'Thank you very much!
A very professional service, and I will be recommending you in the future'

Maidment Judd 'MVL’ Client

'Thank you so much for letting me know and for all your help.
It has been such a relief to finally found someone who would take on the work and carry it out so professionally.
Thank you again for your work.'

Maidment Judd Client

'Absolutely fantastic news. I'd like to thank you for all your help and advice, without which I don't think I would have received anything'

Insolvent Company's Employee

'Thank you for your help through such a difficult time, it has been extremely helpful and is really appreciated'

Maidment Judd Client