Winding Up a company in 2009

The Directors will elect to wind up the company and propose to instruct an insolvency practitioner to call a meeting of creditors. The shareholders of the company will in turn agree. In most small businesses the shareholders and the directors will generally be the same people.
The statement of affairs is prepared and will confirm that the company is insolvent and needs to cease to trade. It proposes that the creditors vote to allow the company to go into insolvent liquidation. Many companies will have crown debt such as unpaid Inland Revenue PAYE arrears and maybe unpaid VAT to Customs and Excise.
The meeting can be held as little as two weeks after a company first decides to close, as only two weeks notice of the meeting is required. Generally the company will be declared insolvent within a month from start to finish.
With the current recession looking like it will continue for some time and even then growth will be very sluggish for a few years, many business owners will not be able to see a way out of their current malaise.
When a director feels he can’t continue he will probably take the view that winding up the company is the correct procedure to take. However he will probably not know how to go about this.
We are experts in helping directors take steps to wind up a business. It can be done with little fuss and not too much expense, the costs of which will come out of the company assets in any event.
The creditors voluntary liquidation or CVL will be the most favoured route. The costs of winding up the company in this way will be in the region of £4,000 – £5,000. Most of the costs are taken up by the preparation of the statement of affairs and calling and hosting the meeting.
In the interim the directors may well start trading from a new company doing the same work. This is called a phoenix,and if they have bought the assets back from the liquidator this will be known as a pre-pack sale.

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