When a company is unable to continue trading and must shut down its operations, it is liquidated. This could be for a variety of reasons, but the most common reason is financial difficulties.
In Ireland, there are three options for winding up a business: members voluntary liquidation, creditors voluntary liquidation and court liquidation,
Court liquidations, as the name implies, are carried out by court order in response to a secured or unsecured creditor’s petition. Members Voluntary Liquidations and Creditors Voluntary Liquidations, on the other hand, are both voluntary procedures.
A creditors voluntary liquidation (CVL) occurs when an insolvent firm decides to go into liquidation on its own. We can help you by advising you on your legal responsibilities and assisting you with the procedures required to put the company into liquidation.
The company’s directors are usually the ones who start a creditors voluntary liquidation. The board of directors must convene a meeting to agree on the company’s administration and the distribution of notices to shareholders and creditors.
After a board of directors decides to retire or when a business has run its course, a members voluntary liquidation is used to liquidate the company’s assets and distribute the surplus to the shareholders in a tax-efficient manner. It’s also a good technique to get rid of defunct businesses that no longer provide a purpose.
There are no creditors involved in a members voluntary liquidation because it is undertaken by the shareholders. The directors must sign a Declaration of Solvency confirming that the company can pay any outstanding obligations in full within 12 months. Following the end of the liquidation, the corporation is dissolved.
This usually occurs as a result of a court-ordered winding up on the basis of a petition from a creditor, the Director of Corporate Enforcement, a shareholder, or the corporation itself.
The Court appoints an Official Liquidator, who has the authority to liquidate a company, investigate its activities, and prosecute its directors.
The answer to this question is largely dependent on your personal circumstances. A members’ voluntary liquidation will be your best alternative if your firm is solvent. A creditors’ voluntary liquidation, on the other hand, is appropriate if your company is insolvent.
It’s worth noting that after a member’s voluntary liquidation is complete, shareholders are notified of the sale process. In a creditors’ voluntary liquidation, creditors receive the revenues from the sale of assets.
TAS Consulting Limited has a long and successful liquidation track record. We’ve been assisting Irish businesses through challenging times for many years.
Our expertise unites a cross-departmental team of specialists to provide our clients with the best results possible.
We offer a range of services to Startups & Businesses in Ireland.