Types of company liquidation
There are several types of company liquidation which can take place, below we explain how they are different from each other, to help you choose the best solution for your business.
Members’ Voluntary Liquidation (MVL)
If your company is solvent and able to pay all its debts, but you intend to close the business or restructure it, a Members’ Voluntary Liquidation may be the appropriate method to wind the company up. You will still need the services of a Licensed Insolvency Practitioner.
Creditors Voluntary Liquidation (CVL)
This is the most common route to wind up the affairs of an insolvent company (i.e. where a company is unable to pay its debts as and when due and/or liabilities exceed assets). In a CVL, the shareholders resolve to wind the company up and the directors will assist the Liquidator (who will be a Licensed Insolvency Practitioner) to prepare the necessary information to be presented to creditors. The Liquidator, once appointed, will take the necessary steps to sell any assets the company has and distribute any funds to creditors.
This is a Court procedure whereby a creditor of the company takes steps to wind the company up.The Official Receiver will be appointed Liquidator on the making of a Winding Up Order.