Updated: 8th February 2021
If your company is struggling financially, you may have come to the conclusion that closing the business is the only realistic way forward. Closing an insolvent company must be done under the guidance of a licensed insolvency practitioner who will act as the liquidator for the business. This is done through a process known as a Creditors’ Voluntary Liquidation (CVL).
As it is unlikely to be something you have done before, you may be uncertain as to how you go about finding an insolvency practitioner to assist with the closure of your company. In fact there are several options for finding a liquidator.
Directors are often recommended or introduced to an insolvency practitioner through their accountant. This is because once a company begins to experience financial difficulties a director often turns to their accountant for help and advice in the first instance.
It is important to note that only a licensed insolvency practitioner can be a liquidator of a company. Therefore if your accountant believes your business is beyond rescue, they will not be able to help you with this process, and will instead need to refer you to an insolvency practitioner to discuss further.
For some company directors, using an insolvency practitioner who comes recommended by their accountant provides a reassuring level of confidence. However, depending on your situation, and in particular your relationship with your accountant, this may not be possible.
In some cases when a company reaches the point of insolvency, the relationship between director and accountant has irretrievably broken down often when the director has reason to blame the accountant in part for the company’s failure. It is unlikely such a director would be happy to take further advice or recommendations from their accountant, and is likely to seek insolvency advice elsewhere.
As the world is moving increasingly online, the insolvency industry is no different. It is now extremely common for directors to find a liquidator for their company by searching for one online.
While this is a perfectly fine way of finding an insolvency practitioner, as when it comes to making any big decision involving your company, you must be sure to do your due diligence before going ahead. Consider whether they are a company that operates solely online or whether they give you the option of having a physical meeting as well. While it is true that, in the majority of cases, a liquidation procedure can be done through a series of phone calls and emails, for a process which is so important to yourself and your business, you may feel more comfortable meeting your insolvency practitioner in person and discussing the process face-to-face. Real Business Rescue has over 70 offices located up and down the country where you can arrange a free consultation with a licensed insolvency practitioner; this meeting is something we would always recommend you to make use of.
Also, be sure you are actually speaking to a firm of insolvency practitioners when you make your initial enquiry. Some online companies appear to be insolvency practitioners when in reality they are acting solely as lead-generators who will then pass the enquiries they receive onto an outside liquidator. With Real Business Rescue you can rest assured that you will be speaking to a member of our team right from your first conversation with us.
If you are a company director dealing with falling sales, a reduction in turnover, or mounting debts, contact the experts at Real Business Rescue today. Our team of licensed insolvency practitioners will take the time to understand your situation and will be able to suggest the most appropriate course of action moving forward. This may involve implementing a recovery procedure such as a Company Voluntary Arrangement (CVA), or else there may be no alternative but to bring the company to an orderly shutdown through a Creditors’ Voluntary Liquidation. Call our team today on 0800 644 6080 to arrange a free no-obligation consultation.
13th October 2021
The Bank of England has said it anticipates that rates of corporate insolvency will increase in the coming weeks following the removal of restrictions on winding up petitions.Read More