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What types of liquidation are there? 1.Members' voluntary liquidation (or members' voluntary winding up) - this is when the shareholders of a company decide to put it into liquidation, and there are enough assets to pay all the debts of the company, i.e. the company is solvent.
2.Creditors' voluntary liquidation (or creditors' voluntary winding up) - this is when the shareholders of a company decide to put the company into liquidation, but there are not enough assets to pay all the creditors, i.e. the company is insolvent.
3.Compulsory liquidation (or compulsory winding up) - this is when the court makes an order for the company to be wound up (a 'winding-up order') on the petition of an appropriate person. If there is more than one director, all the directors must jointly present the winding-up petition - a single director cannot present a winding-up petition.
Where can I get advice about liquidation?
Before you take any action to put a company into liquidation, you should obtain your own legal or financial advice about this procedure and any other options available to you. You can get advice from your local Citizens Advice Bureau, a solicitor, a qualified accountant, an authorised insolvency practitioner, any reputable financial adviser or a debt advice centre.
What are the alternatives to liquidation?
There are 3 possibilities:
1.Informal arrangement - the company could consider writing to all its creditors to see if a mutually acceptable agreement can be reached. It is advisable to include a timetable of when payments will be made.
2.Company voluntary arrangement (CVA) - this is a formal version of the arrangement described above. The directors would need to apply to the court with the help of an authorised insolvency practitioner, who would supervise the arrangement and pay the creditors in line with the accepted proposals.
3.Administration - this is a court procedure that gives the company some breathing space from any action by creditors. A court can grant an administration order to enable the company to:
survive, in whole or in part, as an ongoing business;
organise a voluntary arrangement or compromise with its creditors;
get a better realisation of assets than would be possible if the company went into liquidation. http://www.bankruptcyinstruction.com/ I am owed money by a company that is in liquidation If you are a creditor (owed money by) of a company in liquidation the Official Receiver (OR) will normally notify you (within 12 weeks of the date of the court order) whether a meeting of creditors will be held. The OR will decide to hold a meeting if the company has significant assets available that can be realised for the benefit of creditors. You will also be sent a report giving estimates of the insolvent’s assets and liabilities and what the causes of the failure are considered to be. If you think that a bankrupt or company is withholding information about its assets, you should write to the OR dealing with the case. If you have not been contacted then you should write to the OR or insolvency practitioner (IP) if the case has been handed over to one, quoting the court reference of the case if possible, advising him/her that you are a creditor. What are the alternatives to compulsory liquidation? There are 3 possibilities: Informal arrangement - the company could consider writing to all its creditors to see if a mutually acceptable agreement can be reached. It is advisable to include a timetable of when payments will be made.
Company voluntary arrangement (CVA) - this is a formal version of the arrangement described above. The directors would need to apply to the court with the help of an authorised insolvency practitioner, who would supervise the arrangement and pay the creditors in line with the accepted proposals.
Administration - this is a court procedure that gives the company some breathing space from any action by creditors. A court can grant an administration order to enable the company to:
survive, in whole or in part, as an ongoing business;
organise a voluntary arrangement or compromise with its creditors;
get a better realisation of assets than would be possible if the company went into liquidation. Referred from: (http://www.insolvency.gov.uk/)
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