As a Director of your business, if the pressure is mounting, then a Creditors’ Voluntary Liquidation (or CVL) may be the best option for you and the business.
Are you on payment plans with all your creditors? Dodging phone calls from creditors chasing payment? Getting conflicting advice? Call Us.
A CVL is a legal process through company law that gives YOU, the Director, the ability to either close the company down, or potentially restructure and drive the business forward to bigger and better things.
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The Director (and Shareholders) appoint a Liquidator to the business. The Liquidator then investigates the affairs of the business, and works through a controlled closing down of the business whilst communicating to creditors, and realising any value in assets.
Do you want to continue to run a similar business in the same industry?
Through the liquidation process, the Director may have the opportunity to “buy back” the assets of the business into a new entity and start trading a new business. This is a form of restructuring that assists Directors to get back on their feet, debt-free, and continue to employ people.
Things to be aware of as a Director
Personal Guarantees
When liquidating a company, you need to have a full understanding of what personal exposure you have. You may have in the past signed Personal Guarantees for items such as: Bank Loans, Property Leases, Asset Leases or Trade Suppliers. You will need to go through your documentation to assist in understanding your personal position.
Director Loan Accounts
If you have taken funds from the company above and beyond a salary or dividends, these will be recorded in the company accounts as a Director Loan Account. When the company enters into Liquidation, this Loan Account will be classed as a Debtor and therefore chased by the liquidator for payment back to the company.
