What does Company Liquidation mean?

 

 

 

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Liquidation is the formal process of closing a limited company. Liquidations can be used to close businesses due to insolvency, or simply as a means to extract proceeds from a profitable and solvent company.

There are three main types of liquidation in business:

• A Creditors' Voluntary Liquidation (CVL) which is used when you want to formally close down an insolvent company
• A Members' Voluntary Liquidation (MVL) which is used when you're looking to extract funds in a tax efficient way from a solvent company
• And a Compulsory Liquidation where a creditor issues a winding up petition to force the closure of a business.

The most appropriate liquidation process for a company will depend on a number of factors but it will mainly come down to the financial position of the business of the time of the liquidation. To know more about liquidation and what this means for your business, please call the Real Business Rescue Team to arrange a free consultation.