Corporate Recovery
Financial pressure can affect even strong businesses. Short term cash flow issues, creditor pressure, or market changes can put your company at risk. The right legal advice can protect your position and give your business time to recover. We regularly advise businesses on Company Voluntary Arrangements (CVAs), Administration, Receivership, and Liquidation. Helping you understand your options clearly, we act quickly when urgent decisions are needed.
Company Voluntary Arrangements (CVAs)
A CVA is a formal agreement that lets you repay creditors over time while continuing to trade, over an agreed term. It binds all creditors, helps avoid more serious insolvency action, and keeps costs relatively low. You gain breathing space to restructure, improve cash flow, and build a stronger, more sustainable future for your business.
Administration
Administration is a procedure which allows an independent Insolvency Practitioner to run, reorganise and sell your company (where possible). Your company will benefit from a moratorium (a stay on proceedings) which allows you to operate in a protected environment. The need to enter into Administration can sometimes be extremely urgent. Therefore, you will need an experienced legal team to guide you through the procedure.
Receivership
Receivership is a creditor remedy used to realise company assets secured under a qualifying charge created before 15 September 2003. It is now rarely used. Where a floating charge was created after this date, a qualifying floating charge holder can place the company into Administration.
Liquidation
Liquidation is the formal process of closing a company and distributing assets to creditors. It is often considered when the business is no longer viable or where liabilities cannot be met. Although commonly associated with creditor action, directors and shareholders can also choose to place a company into Liquidation. Taking advice early helps ensure the process is handled correctly and responsibilities are met.
Creditors Voluntary Liquidation (CVLs)
Creditors Voluntary Liquidation is used when an insolvent company cannot continue trading. Directors choose to place the company into Liquidation because it cannot meet its financial obligations. A Liquidator is appointed to realise assets and distribute funds to creditors in accordance with insolvency law. Directors’ powers cease once the Liquidator is appointed.
Members Voluntary Liquidation (MVLs)
Members Voluntary Liquidation applies where a company is solvent but the owners decide to close the business. It is a formal tax-efficient process. This may be part of retirement planning, restructuring, or bringing a project to an end. The process allows assets to be distributed efficiently while ensuring all legal requirements are met. A statutory declaration of solvency must be provided before the process begins.
How long does liquidation take
The length of a lliquidation depends on the complexity of the company’s affairs and the nature of its assets. Some matters conclude within months, while others can take two of three years longer where investigations or asset recovery is required. The process completes once assets are realised, distributions are made to creditors, final accounts are submitted to Companies House, and the company is formally dissolved.
Questions we’re often asked
Liquidation is the process of winding up a company's affairs, realising its assets, and distributing proceeds to creditors before the company is dissolved. Administration (or its equivalents in other jurisdictions) is a rescue-oriented procedure aimed at achieving a better outcome for creditors than immediate liquidation, often by restructuring the business or facilitating a sale as a going concern. Receivership typically involves the appointment of a receiver by a secured creditor to realise assets subject to that creditor's security.
Directors should act as soon as financial distress is apparent, such as persistent cash flow issue, inability to pay debts as they fall due or pressure from creditors or HMRC. Early action increases the likelihood of a successful rescue.
Once directors know or ought to know that a company is likely to become insolvent, their duties shift. They must have regard to the interests of creditors as a whole, rather than solely to shareholders. Directors may face personal liability and should take professional advice promptly and document their decision-making carefully.
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