Reply to: Members Voluntary Liquidation Companies - Recommendations?

[Maslins]

Can you provide some details of the bond that is given during the liquidation period?

If anything did happen, who gives the bond and how secure is this?

All licensed insolvency practitioners will have a bond in place (and they can't do a liquidation without it). Not something any client of ours has had to call on. Perhaps someone else can explain the techy side of how it works...but I personally don't know.

[castoff101]

Hi Maslins

Can you provide some details of the bond that is given during the liquidation period?

If anything did happen, who gives the bond and how secure is this?

Thank you

[Maslins]

Thanks. Is HMRC taking about 6 months at present to finalise closures?

Sadly, yes, that's what we're typically seeing. Couple of links to demonstrate that we're not the only liquidators having a nightmare with HMRC (used to be ~3 months average) here and here. Both a bit old now, but we're yet to see any improvement unfortunately.

[jamesearljones]

Depends on whether the director (aka you) is happy to chase the bank regularly. Even the slowest banks have typically dealt with the account closure/fund transfer within 60 days. 30 days fairly average. Fastest banks manage it in under a week.

Thanks. Is HMRC taking about 6 months at present to finalise closures?

[Maslins]

When you say painfully slow for Lloyds, what would be the typical time period?

Depends on whether the director (aka you) is happy to chase the bank regularly. Even the slowest banks have typically dealt with the account closure/fund transfer within 60 days. 30 days fairly average. Fastest banks manage it in under a week.

[jamesearljones]

From our perspective it being in a savings/current account with one bank makes negligible difference. Typically the bank in question will close both accounts at the same time.

Where it's spread across different banks, it can cause a problem. Reason being each bank will respond on their own timescales, so we might get some of your company's cash really quick, but then be waiting ages for the remainder.

Certainly makes our life easier if you combine it to be held with one bank.

Barclays and Cater Allen are without doubt the two best banks we deal with.
HSBC/Santander are ok.
Natwest/Lloyds/BoS/RBoS are painfully slow.

Hi Maslins,

When you say painfully slow for Lloyds, what would be the typical time period?

[castoff101]

Think it's time to take a long break... will be 59, so may not ever start again

[northernladuk]

Ok thank you Maslins for your reply.

I will be looking to liquidate next May (current contract will more than likely end) so will be in contact

What are you going to do next?

[castoff101]

Ok thank you Maslins for your reply.

I will be looking to liquidate next May (current contract will more than likely end) so will be in contact

[Maslins]

This question is aimed at Maslins.

On their website part of the closing down process is "Company funds transferred to liquidation estate account".

Why do the funds have to be transferred at all to another third party account?

Thank you

It's an understandable concern a lot of potential clients of ours have, entrusting high five/six figure sums to "some firm off the internet".

In terms of "why", when appointing a liquidator you are handing over control of the entire company to the liquidator. They effectively take over from your role as director, and become responsible for the company, its trading, all of its assets and liabilities. Obviously for an MVL Online case, it's tax motivated, so to keep the costs low we get you to have stopped trading, and dealt with all liabilities and non-cash assets. Legally though the same thing applies, we're taking control of your company.

As soon as the company enters liquidation (or more practically as soon as the company's bank become aware of it), your access to the company bank account will be frozen. We'll need to write to the bank, they'll check our details and what they say is correct, before transferring the money to a client account we'll have set up.

The above is all perfectly normal. One of the disbursements of a liquidation is a bond, which effectively insures your money for the period it's under our control...so if hypothetically we did all get run over by a bus, or one of us stole the money and went to Mexico, you'd be covered anyway.

We've done approaching 500 cases now in the last 3 years, paying out >£68m to happy customers. You shouldn't be concerned.

[northernladuk]

Thank you... but if you are a cash rich soon to be ex-contracting company it seems quite a risk to transfer over what could be many hundreds of thousand pounds.

The article seems to suggest that the company being liquidated is in financial trouble, in which case the funds being held would be quite small.

Just makes me uneasy, just handing over mega bucks

Who else do you think should do it. You are thinking like a contractor trying to get his money cheap. Think like you are a business and you are following an age old model to liquidate a company.

[TykeMerc]

Thank you... but if you are a cash rich soon to be ex-contracting company it seems quite a risk to transfer over what could be many hundreds of thousand pounds.

The article seems to suggest that the company being liquidated is in financial trouble, in which case the funds being held would be quite small.

Just makes me uneasy, just handing over mega bucks

Don't liquidate then......

A Liquidator undoubtedly places far more value on their professional reputation than on your money. Even in financial cacky some companies have millions in plant, stock, property and contracts, you're just being daft.

[castoff101]

Thank you... but if you are a cash rich soon to be ex-contracting company it seems quite a risk to transfer over what could be many hundreds of thousand pounds.

The article seems to suggest that the company being liquidated is in financial trouble, in which case the funds being held would be quite small.

Just makes me uneasy, just handing over mega bucks

[northernladuk]

Google is your friend.
http://www.companyrescue.co.uk/credi...re-and-process

There is a section explain what the liquidator does. Essentially they are impartial middle man.

[northernladuk]

This question is aimed at Maslins.

On their website part of the closing down process is "Company funds transferred to liquidation estate account".

Why do the funds have to be transferred at all to another third party account?

Thank you

Google is your friend.
http://www.companyrescue.co.uk/credi...re-and-process