According to www.companyliquidations.co.uk a company going through a voluntary liquidation (CVL) is the most common practice used in the business marketplace to achieve a business recovery when a company has basically run its course or come to a standstill. A CVL may be the only viable option left when the business has no money or valuable assets to trade and has no feasible trading avenue but has debts to be paid and creditors owed monies.
A business cannot just go into CVL and must seek professional company insolvency advice to understand how company liquidation works and if it is the right solution to their financial problems. The alternative to liquidating your company is a Company Voluntary Arrangement (CVA), this a proposal where the company agrees to repay all the debts over a long term period, however, this is not all it promises to be.
A company that has gone into CVA trades at a credit rating of zero, thus making it virtually impossible to obtain credit terms from suppliers. This makes trading very difficult as a CVA involves long term monthly payments to repay the debt – this burdens the trading and often leads to falling into arrears. If a company (in CVA)falls into arrears for 60 days or fails to make a payment for two months can be forced into liquidation at any time during the regular 5 year CVA. Most of the time, the companies that opt for a CVA rarely run their course and fall back to square one - needing business liquidation help.
Liquidating a company works on so many different levels for a business, the main being the directors are not held liable when going into insolvency and also this process is cheap, easy and fast. Once liquidated assets can be acquired at distressed prices and payment terms can be arranged with the liquidator at an affordable rate.Thus allowing to fall out of debt and begin trading much more easier.
