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Liquidation is a process through which a Limited Company ceases trading. Depending on the Company's financial position, the liquidation could either be Voluntary or Compulsory.

Members Voluntary Liquidation (MVL)

If a Company is able to pay all it's debts but needs to cease trading a Members Voluntary Liquidation (MVL) may be appropriate. A Members Voluntary Liquidation (MVL) is a Voluntary procedure to wind up the business of a Solvent Company.

The Members of the Company are the shareholders. To be classed as Solvent, the Company must be able to pay all it's debts and the costs involved in winding up, within 12-months. A Members Voluntary Liquidation (MVL) is typically used where the shareholders of a Company wish to retire or close their business for any other reason than debt problems.

Creditors Voluntary Liquidation (CVL)

A Creditors Voluntary Liquidation (CVL) is a process through which the Directors of an Insolvent Company voluntarily take steps to wind the company up. A Creditors Voluntary Liquidation (CVL) is typically used where the Directors have identified that the company is insolvent and the business is no longer viable.

The Company's Directors call a meeting of the Shareholders and Creditors in order to consider a resolution to wind-up the company. Once the resolution is passed, a Liquidator is appointed to wind-up the Company's affairs.

The Directors or Shareholders may wish to buy back certain assets from the Insolvent Company; this process will be handled by the Liquidator.

Compulsory Liquidation

Compulsory Liquidation is a process of winding-up an Insolvent Company through the Courts. The winding-up process is usually initiated by one of the company's creditors once they have been unable to recover money owed to them through all other channels. Typically, as a last resort a creditor would apply to the Court for a Winding-Up Petition. In these situations the Directors conduct will be investigated.

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Anderson Brookes Insolvency Practitioners Ltd is a limited company registered in England and Wales; company registration number is 10324159. Registered office address is 4th Floor, Churchgate House, Bolton, Lancashire BL1 1HL. Brendan P Hogan is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Licence Number 101680.