Insolvency

Corporate Insolvency Support for UK Businesses - Company Rescue, Restructuring and Liquidation Options

The company closure routes available will be influenced by whether the action is voluntary, following mutual agreement between directors, or compulsory, due to an order from the courts. Our range of professional services to stakeholders of limited companies includes a partner-led approach to deliver company rescue and company closure advice to both insolvent and solvent companies.

Our insolvency practitioners will work closely with businesses in financial distress to arrive at the root of the problem, such as poor cash flow, HMRC debts or creditor pressure. We will diagnose businesses in financial difficulty to determine if they can be recovered or if company liquidation can seamlessly bring company affairs to a close.

Closure Options for Insolvent Companies

If your limited company is insolvent, and therefore unable to meet its outgoings, or company liabilities outweigh assets, and there is no realistic possibility of the situation improving, placing the company into insolvent liquidation may be the best option.

Voluntary Liquidation - If your company is insolvent and it is unlikely that it can be recovered, you may decide to voluntarily place the company into liquidation. This is done using a formal insolvency process known as a Creditors’ Voluntary Liquidation – or CVL. A CVL can only be entered into under the guidance of a licensed insolvency practitioner who will identify and sell company assets, liaise with outstanding creditors, and formally close the company.

Compulsory Liquidation – If your business cannot afford to pay creditors, including HMRC, it may be forced into liquidation following non-payment, this is known as Compulsory Liquidation. When all other collection efforts have failed, creditors may petition the courts to have your company compulsorily wound up by serving a Winding Up Petition as a final resort. Unless you can successfully defend the WUP, your company will be forced into liquidation.

A partnership can be placed into liquidation in the same way as a limited company through a Partnership Liquidation.

Closure Options for Solvent Companies

If you wish to close your solvent limited company, there are two main ways in which you can achieve this. There are many reasons a solvent business may be closed, such as owner retirement, changing market conditions or as the company directors which to pursue other business interests.

Company Strike Off/Dissolution - If your company is no longer required, you can apply to have the company struck off the Companies House register through a DS01 form. Company strike off, also known as dissolution, is a cheap way of closing a limited company without debts.

If your business has over £25,000 worth of cash or other assets to distribute, it is highly likely that opting for a formal solvent liquidation process by way of an MVL will prove to be the most cost-effective manner of closing down a solvent company.

Members’ Voluntary Liquidation (MVL) - A Members' Voluntary Liquidation is a formal process that brings a solvent company to an orderly end. The funds extracted from the business using this method are treated as capital gains rather than income and taxed accordingly. Many will also be able to take advantage of Business Asset Disposal Relief (BADR) – formally known as Entrepreneurs’ Relief – which reduces the payable rate of tax even further, down to just 10%.

Company Rescue Options for Companies

A business in financial distress can be rescued by pursuing a suitable company rescue or restructuring route to ease financial worry, satisfy creditors and release cash flow to stabilise company health.

Our insolvency practitioners can advise on a range of company rescue options that include:

Company Administration – Placing a company into administration gives time and legal protection while an administrator – who must be a licensed insolvency practitioner – is appointed to take control of the company to negotiate the best outcome for company creditors. A company can exit administration in several ways, from a business sale, an alternative insolvency process such as a CVA, or eventual voluntary liquidation if the company is not deemed viable.

Administrative Receivership – Administrative receivers are appointed to sell company assets and realise funds to repay secured creditors. Although administration is more common, this route may be pursued where secured creditors can appoint an administrative receiver when holding security, i.e. a debenture. 

Company Voluntary Arrangement (CVA) – A CVA enables you to negotiate a legally binding repayment plan with outstanding creditors, typically between 3-5 years. Depending on the debt levels and affordability, some debt may be written off, with the remainder paid back through a series of affordable and sustainable monthly repayments. CVAs must be overseen throughout their duration by a licensed insolvency practitioner.

Fast Track CVA – A Fast Track Company Voluntary Arrangement is an accelerated Company Voluntary Arrangement suitable when dealing with company debts under time-sensitive conditions.

LPA Receivership – The Law of Property Act or Fixed Charge Receivership, also known as an LPA Receivership, is a tool used by lenders to recover debt on a defaulted property loan. 

Our licensed insolvency practitioners work with company directors, business owners and financial institutions to advise on company rescue and closure routes to maximise returns for both creditors and shareholders.

Personal Debt Solutions for Individuals

Our personal debt advisors can help individuals in debt find a solution to their debt problems by exploring debt management and settlement plans. The routes available will be dependent on personal circumstances, such as income, assets, and debt levels.

The personal insolvency solutions we can advise on include:

• Individual Voluntary Arrangement
• Bankruptcy
• Debt Arrangement Scheme (Scotland only)
• Sequestration (Scotland only)
• Trust Deed (Scotland Only)

Our expertise on company rescue, closure, and liquidation options are trusted by company directors, business owners, and professional intermediaries, including accountants and banks. We are one of the UK’s largest providers of corporate insolvency services delivered by a nationwide team of licensed insolvency practitioners from our network of over 100 offices.