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Liquidation in London, UK - Winding-up a Company

Company liquidation in London, UK comes in three varieties: members’ voluntary, creditors’ voluntary and compulsory liquidation. If you think that you may be heading into a liquidation situation, it is necessary to understand the “ropes”. Let’s take a closer look.A members’ voluntary liquidation occurs when the shareholders of a given company agree to wind up the company and the company itself is solvent. Solvency is a state in which the company possesses sufficient assets to pay all company debts.

A creditors’ voluntary liquidation occurs when the shareholders of a given company agree to put the company into liquidation, but the company is insolvent, i.e. the company has too few assets to cover its existing debts.A compulsory liquidation occurs when the court orders a company to wind up. This action would be initiated by a petition being filed by an appropriate person. If the company has more than one director, all directors must file the petition jointly.Prior to initiating any action concerning the liquidation of a company, it is advisable that you seek your own legal and financial advice from any number of sources available to you. You can begin your search with the Citizens Advice Bureau, a licensed insolvency practitioner (IP), a financial advisor , accountant or any given debt advice centre.

There are three alternatives to UK liquidations: informal arrangement, company voluntary arrangements and administration orders. An informal arrangement is simply the company contacting its creditors to discern whether acceptable terms can be agreed upon. Payment amounts and a timetable are generated.A CVA, or company voluntary arrangement, is a formalized version of an informal arrangement. The court is involved in a overseeing capacity. An IP supervises the situation and ensures adherence to the plan generated.

An administration order comes via the court system and affords a company some room to breathe and function without any possible action taken against it by creditors. The administration order will specify the details for the company and its creditors to follow. The process is also supervised by an IP.

London liquidations are a relatively common business practice in the UK. There is a lot to learn. Contact a professional advisor today.

Written by Cynthia Kramer. Find the latest information on Liquidation London as well as Liquidation UK

Source: www.ezinearticles.com