Save Creditor Company with airSlate SignNow

Save creditor company

if all else fails and you're struggling through debt the tough option of closing your company might be the best option for both you and your creditors it's called a creditors voluntary liquidation or a CVL so Kevin if I had a struggling company how would you explain a CDL to me well Simon a creditor is anyone your company owes money to and in a CBL a meeting of the creditors is called where the situation is explained by somebody called an insolvency practitioner who is then we hope you pointed and that person acts as a sort of executive to lecrae and close the company so it's kind of like closing off a person's estate but in this case it's a company yeah exactly and when it's finally closed any remaining debts of the company die with the company that would be a relief wouldn't it but I guess it's only to be used as a last resort yes the most common reasons for a company to seek a CBL is that the directors of the firm have recognized there's no real prospect of the company trading out of its current problems or even that it's no longer in a position where it can trade at all for example it may be on stop in many cases is better to do a company voluntary liquidation let's say allow it to be put into a compulsory liquidation why is that the better option then well a compulsory liquidation costs the taxpayer money if it's HMRC or the creditor the company is handed over by the court to the official receiver who's a civil servant they do the same job as the insolvency practitioner but now you will be dealing directly with government and that makes life more difficult for some directors okay so Kevin how would I the director go about organizing a CBL but Simon it's not complicated you have to appoint for our or an independent insolvency practitioner we draft a board resolution which is basically a formal decision of the directors that the company has no choice but to be closed and liquidated and that's the director what I have to attend the meeting of creditors that's quite a challenge to come face-to-face with all the people I owe money to yes and that's why it's part of the support we provide it's a difficult time but I'm sure you realize that creditors are entitled to have the opportunity to ask questions and the challenge of directors about the circumstances surrounding the insolvency and what are they one of the company's assets these can be sold to repay the creditors one all the asses have been sold off the companies then dissolved and removed from companies house register so does this mean the business is lost to the original directors and shareholders surprisingly no and I mean the limited company in its debts have died but the liquidator has a duty to recover value for creditors and the best we can do this is to sell the assets and the most reasonable way of selling those assets is to the original owners shareholders or directors when this happens the enterprise can be reborn under what we call a Phoenix company this is not only legal but often is in the best interest of the creditors and the economy it protects jobs it gives the owners a second chance Kevin thank you so for further information on creditors voluntary liquidation or phoenix companies please call us using the number that's on the screen right now