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Insolvency

Insolvency is a state of financial distress in which a business or person is unable to pay their bills. It can lead to insolvency proceedings, in which legal action will be taken against the insolvent person or entity, and assets may be liquidated to pay off outstanding debts.

Legal Handshake

We deliver tailored solutions to company directors, business owners, and individuals. We offer assistance from professional advisors & licensed insolvency practitioners to ensure that the information given is the most appropriate solution for your circumstances. According to the Legal service act and Insolvency legislation, we are directly not proceeding with legal litigation as Licensed Insolvency Practitioners. 

Creditors Voluntary Liquidation

Numerous companies trading in the UK at present may find themselves in an insolvent position but many may still be viable businesses that are suffering from short-term cash problems. However, it’s time to take action if you feel that your company cannot continue trading without worsening the position of its creditors.

If you’re looking to place an insolvent company into liquidation, this process is called Creditors’ Voluntary Liquidation – known as a CVL. This solution is appropriate when there is no other option than the company ceasing to trade and being wound-up. In a CVL, assets are realised and sold with a view to paying a dividend to creditors where possible.

Partnership Voluntary Arrangement

In fact, the PVA process is practically identical to that of a CVA with the obvious differentials surrounding partnerships rather than companies. Partnership members would be responsible for drafting the PVA proposal which in a Company Voluntary Arrangement (CVA) would be drafted by directors of the company.

It is imperative that a Partnership Voluntary Arrangement is only agreed upon if the partnership itself is a viable business – or where the partnership has a number of valuable and disposable assets that could be realised to raise capital in the short-term and provide a boost to cash flow.

Company Voluntary Arangment

All creditors are then legally bound to accept the terms of the arrangement – including those who were non-voting or did not receive notice of the meeting which provides structure for a proportion of the debts to be repaid over a fixed period of time – typically monthly contributions to the CVA supervisor. 

Alternatively the company may look to sell assets and repay creditors from the proceeds. Whichever agreement is put in place, all involved parties are contractually bound to adhere to the terms and conditions set out.

Partnership Liquidation

In many ways it is a virtually identical process to company liquidation. You can petition the Court to place the partnership into liquidation in the same way that you would a limited company. 

However, there must be an outstanding debt of at least £750 owed to you, against which a Statutory Demand has been issued and not complied with. The demand can be served either at the partnership’s principal place of business, on any of the partners or on anyone else who has control of the partnership at the time of the service. 

Members Voluntary Liquidation

A Members’ Voluntary Liquidation (MVL) (or Solvent Liquidation) enables shareholders to put a solvent company into liquidation in order to unlock their capital. It can be used to secure an orderly winding up of a company or to close down a subsidiary (within a group of companies) that has outlived its usefulness. 

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