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Creditors Voluntary Liquidation is normally driven by Directors with Shareholders meetings in place and liquidation by resolution.
Compulsory Liquidation is normally Court or Creditor driven and a Court will order the Liquidation.
This process is more time consuming than Administration and is less likely to result in the sale of a “going concern” and generally produces lower asset realisations.
Introduced in 1986 via the Insolvency Act to keep off Bankruptcy by allowing a Debtor to propose clearing the unsecured debt but is not a Debt Management Plan.
Proceedings may be brought by creditor or debtor and considered a viable option for debtors with few assets and not much to lose in work terms. Most debts will be written off but not student loans, overpaid benefits or fraud. Bankruptcy is not the perceived “easy option” and can aggravate a debtors situation of all the facts are not considered fully.
This order is only and can only be made by a Court and put simply is the annulment or cancellation of a Bankruptcy order.
It has 3 purposes as per statute:-
1) Rescue the company as a going
concern. Difficult and often not achieved.
2) Produce a better
result for the company’s creditors as opposed to the company
being wound up without first being put into administration.
3)
Realise property to allow a distribution to one or more secured
or preferential creditors.
This is a formal insolvency rescue procedure having a proper negotiated settlement reached with creditors on the basis of proposals offered by the company and is binding on creditors. The result is that the company survives as a going concern and management keep control of it.
As the name implies, the opposite of a formal arrangements which are those detailed in this section. Can be open to abuse.
Very much requires a specialist and extremely skilled mediator if all the parties involved are to sit down together be brutally honest and arrive at an agreed settlement. If correctly driven can allow parties the luxury of not going to Court and the financial savings associated along with an opportunity to settle.
A comprehensive range of Professional Accountancy Services is available along with Book-keeping, Sage accountancy practices, Business Plan preparation, Management Accounts and Sage Line 50 & 100 Training.
For the legal requirements of both Companies and Individuals we partner and engage with Firms across the UK. in many specialist and standard issues.
Dealing with Finance Companies and Investors, including private, we are able to consider many options for the appropriate financing arrangements, subject to status and acceptability.