Effects of liquidation on the liquidating corporation bloomington illinois dating


Obviously, hastily ending a company through a CVL is not in the best interest of creditors, as most of the time it results in debts going unpaid.If it can be shown that the directors used liquidation with the sole intention of deliberately not repaying creditors, they may be held personally liable for the company debts.In a voluntary liquidation, these expenses, along with the cost of appointing an insolvency practitioner, are all covered by the directors.The up front cost of a typical CVL usually ranges from £3000 to £7000, depending on the insolvency practitioner’s rates and the amount of work involved.In a compulsory liquidation the cost of issuing a winding up petition (roughly £1,490-£1,990) is covered by the creditor.Furthermore, the liquidator is appointed by the Court or the creditor.If you add up the wasted advertising expenditure, it becomes clear that ending the company is more costly than expected.



Although liquidating voluntarily offers a number of advantages, it is important that you also consider the following disadvantages of both forms of liquidation: Liquidating your company voluntarily is more expensive for the directors initially (as they might be asked for a fee) rather than waiting for a creditor or HMRC to force the company into compulsory liquidation.There are two voluntary liquidation procedures and one compulsory procedure.The voluntary procedures, which are initiated by the shareholders and directors are explained in more detail below and the compulsory procedure, which is usually initiated by creditors like HMRC via a court order, is also covered.The company’s assets are then sold (liquidated) and any realisation of revenue is redistributed in order of priority.

The company is struck-off the registrar of companies and this is known as dissolution, which is the final stage of the liquidation process.

If it can be shown that the directors did not act in the best interests of creditors then they may be accused of wrongful trading.