Liquidation

There are two types of liquidations – Compulsory (by the court) and Voluntary.
Liquidation ensures that the company’s affairs are closed down in an orderly manner.

Voluntary liquidation comprises of two distinct categories:

A Creditor's Voluntary Liquidation (“CVL”) is more common and occurs when a business is insolvent and has no viability. Directors should consider this option if they want to avoid the risk of wrongful trading.

A Member's Voluntary Liquidation (“MVL”) is appropriate when there are sufficient assets to cover all liabilities in full. An MVL involves the directors swearing a statement, known as a declaration of solvency, to say the company will be able to pay all its debts within a period not exceeding twelve months.