Liquidation Advice Creditors and Members Voluntary Liquidation

The difference between

Liquidation and Administration

While liquidation and administration are both formal insolvency procedures, they are in fact very different processes which ultimately look to achieve very different outcomes. In simple terms, liquidation brings about the end of a company by selling or liquidating its assets before dissolving it entirely. Administration on the other hand, is typically utilised when there is a chance of saving a business which is currently experiencing high levels of financial or operational distress. Let’s explore this further.

Understanding the two types of liquidation...

Liquidation is employed when a company is beyond rescue, or when its Directors no longer want to continue running the company for any number of reasons. There are in fact two different types of liquidation depending on the financial position of the company in question.

Solvent Vs Insolvent Liquidations

If a company is profitable and has reserves of cash or assets – that is, it is solvent – but it is no longer needed, perhaps due to retirement, or if the director is moving onto a new venture, then the company can be closed down by way of a Members’ Voluntary Liquidation (MVL). This allows for the company’s assets to be distributed to shareholders in a time-efficient and cost-effective manner before winding down the company for good. MVLs must be undertaken by a licensed insolvency practitioner, and due to the professional costs involved, they are typically only suitable for those companies with in excess of £25,000 to distribute.

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Liquidation or administration: Which is right for your business?

If your company is experiencing financial difficulties and you are unsure what your next step should be, you are strongly advised to seek the assistance of a licensed insolvency practitioner. At Beyond Insolvency we will refer you to only the most experienced practitioners who will know how to best handle your case.
They will take the time to understand your company and the problems it is currently facing. With this information they can advise you on your possible options and be with you every step of the way no matter what you decide.

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Words from our clients

Here’s what our past clients have said about our experts:

Having traded successfully for over 15 years, it was devastating to realise that losing a key client would put our company into insolvency. But after speaking with the team at Corporate Lifeline I could see that we should’ve called them six months earlier. They were informative and supportive from the outset, which would have avoided months of stress and sleepless...
Mark Griffin Wollongong
Having traded successfully for over 15 years, it was devastating to realise that losing a key client would put our company into insolvency. But after speaking with the team at Corporate Lifeline I could see that we should’ve called them six months earlier. They were informative and supportive from the outset, which would have avoided months of stress and sleepless...
Mark Griffin Wollongong
Having traded successfully for over 15 years, it was devastating to realise that losing a key client would put our company into insolvency. But after speaking with the team at Corporate Lifeline I could see that we should’ve called them six months earlier. They were informative and supportive from the outset, which would have avoided months of stress and sleepless...
Mark Griffin Wollongong
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