Procedures2018-11-23T15:20:00+00:00

PROCEDURES

CG&Co offers a range of procedures

to help with your business

Contact us now on 0161 358 0210 for independent advice.

Restructuring

If your business requires restructuring, we can help you with what can be a complex but vital process to preserve your business. This may involve funding requirements, or a time to pay arrangement with HMRC. Acting early is key to ensure your business has the maximum opportunity to recover.

Solvent Liquidation

A solvent liquidation or members voluntary liquidation (MVL) is where the directors of a company swear a declaration that the company can pay its debts within a twelve-month period, with surplus funds distributed to the shareholders. There may be significant tax advantages for the shareholders in winding a company up via MVL which should be discussed on a case by case basis. If a business owner liquidates a profitable business using an MVL, shareholders may be entitled to entrepreneur’s relief on the distribution that they receive, paying lower rates of tax.

Administration

Administration is an insolvency process by which a company is placed under the control of an insolvency practitioner to enable them to achieve objectives laid down by statute.

The first objective of any administration is to rescue the company (as opposed to the business that the company carries on) so that it can continue trading as a going concern. If the rescue of the company is not possible, the Administrator must aim to achieve a better result for the company’s creditors as a whole than would be likely if the company were put into Liquidation. If the Administrator cannot achieve a better result for creditors as a whole, the purpose of the Administration is to realise the company’s property to make a distribution to the company’s secured or preferential creditors.

To assist the Administrator in implementing these statutory objectives, a moratorium is provided by which creditors and others are prohibited from taking or pursuing legal proceedings against the company while it is in Administration

Insolvent Liquidation

A director can propose a creditors’ voluntary liquidation if the company cannot pay its debts. This means the company will stop trading and be liquidated. The company’s shareholders pass a resolution to wind up the company, and an insolvency practitioner is appointed as Liquidator to take charge of liquidating the company. A statement of affairs is presented to the company’s creditors along with a report including the directors’ reasons for failure and a deficiency account. This gives details of the company’s situation and assets.

There is no longer the requirement to hold a creditors meeting, liquidators are appointed by deemed consent. It is therefore quicker to resolve matters and reduces the associated stress of liquidation. Creditors can request a physical meeting to be held if they meet certain criteria.

Company Voluntary Arrangement

A company voluntary arrangement (CVA) is an arrangement whereby the company continues to trade having reached an agreement with its creditors in satisfaction of its pre-existing debts, usually for a percentage of their value. It can be used in cases where an administrator has already been appointed. The directors propose the arrangement and put it before unsecured creditors for approval. Copies of the agreed arrangement are filed at court. The procedure to put a CVA in place, and the implementation of a CVA, must be supervised by an insolvency practitioner.

Until a CVA takes effect, a company will be unable to prevent creditors from enforcing their rights unless additional protection is sought from the court.

Compulsory Liquidation

Compulsory liquidation is a court-based procedure under which the assets of a company are realised and distributed to the company’s creditors. The procedure is started by the filing of a petition at court. A judge then decides at a court hearing whether it is appropriate to make a winding up order. The most common reason for a winding up order is that the company is insolvent. When a winding-up order has been made, the Official Receiver is initially appointed as Liquidator. The company’s creditors and contributories may appoint another individual, being an insolvency practitioner, to act as Liquidator. The Liquidator is an officer of the Court, and their main function is to collect in and realise the company’s assets, and to distribute the proceeds to the company’s creditors.

A Liquidator has wide-reaching powers to assist him in fulfilling his function. Such powers include bringing legal proceedings in the name of the company, carrying on the business of the company and paying debts.

Restructuring

If your business requires restructuring, we can help you with what can be a complex but vital process to preserve your business. This may involve funding requirements, or a time to pay arrangement with HMRC. Acting early is key to ensure your business has the maximum opportunity to recover.

Solvent Liquidation (MVL)

A solvent liquidation is where the directors of a company swear a declaration that the company can pay its debts within a twelve-month period, with surplus funds distributed to the shareholders. There may be significant tax advantages for the shareholders in winding a company up via MVL which should be discussed on a case by case basis. If a business owner liquidates a profitable business using an MVL, shareholders may be entitled to entrepreneur’s relief on the distribution that they receive, paying lower rates of tax.

Administration

Administration is an insolvency process by which a company is placed under the control of an insolvency practitioner to enable them to achieve objectives laid down by statute.

The first objective of any administration is to rescue the company (as opposed to the business that the company carries on) so that it can continue trading as a going concern. If the rescue of the company is not possible, the Administrator must aim to achieve a better result for the company’s creditors as a whole than would be likely if the company were put into Liquidation. If the Administrator cannot achieve a better result for creditors as a whole, the purpose of the Administration is to realise the company’s property to make a distribution to the company’s secured or preferential creditors.

To assist the Administrator in implementing these statutory objectives, a moratorium is provided by which creditors and others are prohibited from taking or pursuing legal proceedings against the company while it is in Administration

Insolvent Liquidation (CVL)

A director can propose a creditors’ voluntary liquidation if the company cannot pay its debts. This means the company will stop trading and be liquidated. The company’s shareholders pass a resolution to wind up the company, and an insolvency practitioner is appointed as Liquidator to take charge of liquidating the company. A statement of affairs is presented to the company’s creditors along with a report including the directors’ reasons for failure and a deficiency account. This gives details of the company’s situation and assets.

There is no longer the requirement to hold a creditors meeting, liquidators are appointed by deemed consent. It is therefore quicker to resolve matters and reduces the associated stress of liquidation. Creditors can request a physical meeting to be held if they meet certain criteria.

Company Voluntary Arrangement (CVA)

A CVA is an arrangement whereby the company continues to trade having reached an agreement with its creditors in satisfaction of its pre-existing debts, usually for a percentage of their value. It can be used in cases where an administrator has already been appointed. The directors propose the arrangement and put it before unsecured creditors for approval. Copies of the agreed arrangement are filed at court. The procedure to put a CVA in place, and the implementation of a CVA, must be supervised by an insolvency practitioner.

Until a CVA takes effect, a company will be unable to prevent creditors from enforcing their rights unless additional protection is sought from the court.

Compulsory Liquidation

Compulsory liquidation is a court-based procedure under which the assets of a company are realised and distributed to the company’s creditors. The procedure is started by the filing of a petition at court. A judge then decides at a court hearing whether it is appropriate to make a winding up order. The most common reason for a winding up order is that the company is insolvent. When a winding-up order has been made, the Official Receiver is initially appointed as Liquidator. The company’s creditors and contributories may appoint another individual, being an insolvency practitioner, to act as Liquidator. The Liquidator is an officer of the Court, and their main function is to collect in and realise the company’s assets, and to distribute the proceeds to the company’s creditors.

A Liquidator has wide-reaching powers to assist him in fulfilling his function. Such powers include bringing legal proceedings in the name of the company, carrying on the business of the company and paying debts.