Corporate Debt Solutions

Financial difficulty is one of the hardest things a business owner can face. Nobody starts a company with the intention to fail, but sometimes things can decline for reasons beyond our control.

If your business is insolvent – meaning it has more liabilities than assets, or it can’t pay its debts when they’re due – you should consider your options early, to help minimise the impact on creditors.

Creditors' Voluntary Liquidation (CVL)

A Creditors’ Voluntary Liquidation (CVL) is a voluntary formal process for closing down an insolvent company.

A licensed Insolvency Practitioner is instructed by the Director(s) to assist with the formalities of placing the company into liquidation. Once in liquidation, control of the company passes to the appointed liquidator, and creditors are informed of the situation.

Amongst other statutory duties, the liquidator’s job is primarily to collect and sell any available assets, and distribute any funds available after the costs of liquidation to creditors in the form of a dividend.

– What Is a Creditors’ Voluntary Liquidation?

– What Are the Pros and Cons of a CVL?

Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement (CVA) is an insolvency procedure best suited to those who own an insolvent business but wish to keep it from closure. It functions as a formal repayment agreement between a business and its creditors, helping to make debts more manageable on a month-to-month basis.

Spreads debt out, allowing for easier repayment
Freezes interest on debt
Offers legal immunity from creditors

CVAs typically last for about 5 years; any debts left at this point are liable to be written off. While it might affect your company credit, your business will be able to continue as normal, so long as it keeps up with its monthly repayments.

– What Is a Company Voluntary Arrangement?

– What Are the Pros and Cons of a CVA?

Administration

Administration is a formal process which places the business in the hands of an administrator. The administrator will attempt to save the business where possible, after reviewing the company’s structure, staffing, and expenditure.

Can potentially reverse insolvency
Allows the business a chance to regroup through a moratorium period
Can increase the likelihood of being accepted into other rescue schemes, such as CVAs

While administration can still result in liquidation, it does offer a lot of businesses a fighting chance.

– What Is Administration?

– What Are the Pros and Cons of Administration?

Members' Voluntary Liquidation (MVL)

It isn’t just insolvent companies we can help out – in some cases, our assistance is needed with solvent companies too. A Members’ Voluntary Liquidation is a tax-planning exercise, allowing businesses with over £25,000 in cash and assets to liquidate and give returns to company members.

Returns from an MVL are subject to Capital Gains Tax, not Income Tax
Capital Gains Tax is applicable only to the profit made on the sale of an asset, not the entire amount
You may also be eligible for Business Asset Disposal Relief, cutting down the rate of Capital Gains Tax to just 10%

An MVL must be carried out by a licenced insolvency practitioner, like those of our team. The process can take anywhere from between 6-12 months, depending on the size and complexity of the business.

– What Is a Members’ Voluntary Liquidation?

– What Are the Pros and Cons of an MVL?

Book a Free Consultation

With so many options to consider, it’s easy to feel overwhelmed.

However, you don’t have to face up to the spiralling worries of corporate debt alone; our team are on hand to help guide you towards the best solution for you and your business.

Get in touch to book a free consultation today.