Creditors Voluntary Liquidation questions answered.
Following the coming into force of the Insolvency (England and Wales) Rules 2016, any reference to a Meeting refers to a Virtual Meeting, a decision by Deemed Consent or other qualifying decision making procedure.
We have looked at your CVL frequently asked questions and provided you with this useful guide.
How quickly can a creditors’ voluntary liquidation process start?
The process can be started immediately. The directors need to sign a resolution to appoint an Insolvency Practitioner to prepare a statement of affairs and to call a creditors meeting. In practice, there may be certain things that delay the commencement of the process – for example, completion of some work in progress or collection of an outstanding debtor. A timetable will be agreed between the directors and the Insolvency Practitioner.
Once I have decided to put my company into creditor’s voluntary liquidation, what must I watch out for?
There may be good reasons why a decision is made to delay formal commencement of the process. Directors need to make sure that the position of the creditors does not deteriorate and should not take any credit from a supplier knowing that they are unlikely to be paid. Directors should liaise with the Insolvency Practitioner through this period on a day to day basis.
How long is it before the meeting of creditors?
This depends on the period of notice that is required to call a shareholders meeting to formally put the company into creditors’ voluntary liquidation. Typically, this will be around four weeks from the date of the director’s resolution to discontinue trade. This date will be fixed with the Insolvency Practitioner at a convenient time to the directors.
Does the director’s resolution protect the company from any bailiff action whether this be the landlord or supplier or HMRC?
If there is any bailiff action the directors need to bring this very urgently to the attention of the Insolvency Practitioner. So long as the Insolvency Practitioner is aware of the circumstances it should be possible to get protection from creditor action.
How can the Insolvency Practitioner get protection from creditors?
This would be done either by way of bringing forward the meeting of shareholders and putting the company into a creditors voluntary liquidation process immediately or filling at court on behalf of the company a notice of intent to appoint an administrator. All the circumstances would need to be discussed carefully with the Insolvency Practitioner who would recommend a particular course of action.
Griffin & King hope you find these CVL frequently asked questions informative. We have assisted many people with Creditors Voluntary Liquidation – view our testimonials and see how.
You can also find more Creditors Voluntary Liquidation FAQS in Part 2 of this article. If you would like more information on company insolvency please call Griffin & King Insolvency Practitioners on 01922 722205, and speak to Tim, Janet or Mark. You can also contact Janet by email on email@example.com, or by text or calling on 07545 806531.