Insolvency can be defined in two ways; your company is insolvent if its liabilities exceed its assets, or if it is unable to pay its debts as and when they are due.
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-flow 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.
This route is only appropriate if your company is insolvent. For example if:
At Begbies Traynor, we are qualified to undertake the role of Liquidator using our extensive experience and expertise to secure the best outcome.