Reply to: Creditors Voluntary Liquidation (CVL) - recommended licensed insolvency companies?

[creativity]

CVL's shouldn't be taken lightly. You have to hand over all of your accounts to a licensed practitioner who is acting on behalf of HMRC, even if you are paying them. They will spot any illegal dividends or dodgy accounting immediately and hold you accountable.
Worst case scenario is you get a bill and can be held personally responsible for money owed due to being miscreant and be banned from being a director.

My accounts are honest and I have no illegal dividends but need to consider worse case scenario where contracts dry up completely (IR35 is not helping) and the limited company profits drop substantially.

It's a moot point for me now as I've taken on permanent work, so the company will just hang on to its product income which will keep things afloat and I'll remove myself the paid salary and dividends. The company will pay back the loan and be solvent but a shadow of its former self. Probably transfer all the profit into private pension so as to have little in the way of tax.

I guess my original post was asking if anyone knows or have used a CVL practitioner, there are lots out there but many aren't licensed (but will likely be happy to take your money), so would advise anyone to confirm their license number first.
There are generally two ways a CVL practitioner can be instructed; by the director (voted) or by a creditor. The latter being cheaper as the creditor will pay most of the costs.

Clearly no one has used a practitioner but that's fine.
Keep up the good work.

[Paralytic]

That only talks about a same or similar name so not really relevant.

You asked for any long term recourse - I showed there is. If you think that is irrelevant, so be it.

[northernladuk]

There are some restrictions about restarting a company with the same/similar name for a period of time. Ask your accountant if you want more details

Or read here: Section 216 | Reusing a Company Name After Liquidation

That only talks about a same or similar name so not really relevant.

[Paralytic]

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

There are some restrictions about restarting a company with the same/similar name for a period of time. Ask your accountant if you want more details

Or read here: Section 216 | Reusing a Company Name After Liquidation

[Lance]

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

Not much that I know of.
You’ll never a bank to loan your company money without a debenture, but contractors don;t need that.
As long as you’re not struck off there’s not a lot of impact.
Limited liability....

[northernladuk]

It's nothing to do with it being a BBL. And everything to do with it not being profit.

Dividends come from profit ONLY.
Salary is an expense. You can go bust by paying a salary but not by paying dividends (not without breaking the law).


EDIT: I wonder how widespread it will be where business are effectively bankrupted by taking a loan that they think never needs to be paid back. There is a big difference between a government backed loan and a loan that never needs to be repaid. I'm not suggesting that fits the OPs position but I bet loads of other wise viable businesses will be trashed from taking this loan.

What is the longer term fall out from going through CVL? Surely it can't just be a matter of starting another and off you go?

[Lance]

Insolvency is a major pain when it includes the bounce back loan, as dividends are deemed inappropriate but salary and materials are ok.

It's nothing to do with it being a BBL. And everything to do with it not being profit.

Dividends come from profit ONLY.
Salary is an expense. You can go bust by paying a salary but not by paying dividends (not without breaking the law).


EDIT: I wonder how widespread it will be where business are effectively bankrupted by taking a loan that they think never needs to be paid back. There is a big difference between a government backed loan and a loan that never needs to be repaid. I'm not suggesting that fits the OPs position but I bet loads of other wise viable businesses will be trashed from taking this loan.

[northernladuk]

Thanks all.

At the moment the company is still solvent but contracts are drying up so I'm just forward thinking.
I'll probably just find a another contract (or push to sell a few more products) to pay back the loan (it's the bounce back loan by the way) and remain solvent for now.
Then close the company or leave it as it is in case market bounces back.
Luckily I've been offered permanent work so will likely leave contracting, but keep the company for my products only (products I sell make up 30% of the companies income).

Insolvency is a major pain when it includes the bounce back loan, as dividends are deemed inappropriate but salary and materials are ok.

So in conclusion I will keep the company for products only, accept the permanent position and give up contracting.
The math works and I'll be making a good income.

But still need to consider CVL for worst case scenario.

Wish people would put this type of information in their first post rather than drip feeding us.

[creativity]

Thanks all.

At the moment the company is still solvent but contracts are drying up so I'm just forward thinking.
I'll probably just find a another contract (or push to sell a few more products) to pay back the loan (it's the bounce back loan by the way) and remain solvent for now.
Then close the company or leave it as it is in case market bounces back.
Luckily I've been offered permanent work so will likely leave contracting, but keep the company for my products only (products I sell make up 30% of the companies income).

Insolvency is a major pain when it includes the bounce back loan, as dividends are deemed inappropriate but salary and materials are ok.

So in conclusion I will keep the company for products only, accept the permanent position and give up contracting.
The math works and I'll be making a good income.

But still need to consider CVL for worst case scenario.

[northernladuk]

As Lance suggests, two very different things:

An MVL is for a solvent case. Ie the business is not in trouble, it has plenty of assets, just wants a formal liquidation to close. With offerings like MVL Online's, it's typically tax motivated.

A CVL is for an insolvent case. Ie the business is in trouble, cannot afford to pay its debts. A liquidator has some legal powers that the director of a company doesn't, so there can be situations where it's worth paying the liquidator fee for them to deal with things.

I (Chris Maslin) am not a licensed insolvency practitioner, I just work alongside one at MVL Online, so have inevitably got to understand a fair bit about MVLs. We don't do CVLs, and I know very little about them.

My business partner in MVL Online, David Thorniley, has a mainstream liquidation firm, Traverse Advisory Ltd. They'll do liquidations of all shapes and sizes, solvent and insolvent...though as they're more bespoke, less streamlined, the price is quite a bit higher than MVL Online's simple offering. By all means give him a call/email, see what he'd suggest for your situation.

Do I still get my referral bonus though?

[Maslins]

Wouldn't Maslins be able to do this if they are MVL experts? Or is it a different beast?

As Lance suggests, two very different things:

An MVL is for a solvent case. Ie the business is not in trouble, it has plenty of assets, just wants a formal liquidation to close. With offerings like MVL Online's, it's typically tax motivated.

A CVL is for an insolvent case. Ie the business is in trouble, cannot afford to pay its debts. A liquidator has some legal powers that the director of a company doesn't, so there can be situations where it's worth paying the liquidator fee for them to deal with things.

I (Chris Maslin) am not a licensed insolvency practitioner, I just work alongside one at MVL Online, so have inevitably got to understand a fair bit about MVLs. We don't do CVLs, and I know very little about them.

My business partner in MVL Online, David Thorniley, has a mainstream liquidation firm, Traverse Advisory Ltd. They'll do liquidations of all shapes and sizes, solvent and insolvent...though as they're more bespoke, less streamlined, the price is quite a bit higher than MVL Online's simple offering. By all means give him a call/email, see what he'd suggest for your situation.

[Lance]

Wouldn't Maslins be able to do this if they are MVL experts? Or is it a different beast?

Is this loan a scheme loan? If so might be worth asking in the HMRC Scheme threads as well.

MVL is where the company owner wants to liquidate.
CVL is where the company is insolvent and the creditors (usually) issue a winding order. In this case the OP is doing the right thing, but in my opinion, by the wrong route.

EDIT: of course there's more here than meets the eye I suspect. Banks don't loan money to contractor companies. So who is the lender? Something smells dodgy, or it's not a contractor company.

EDIT again: Loan schemes pay the individual not a company so that makes no sense either.

[Lance]

I am after a licensed insolvency practitioner as my company will be insolvent and has debt in the form of a loan.
It's a legal process that requires the use a licensed insolvency practitioner, hence my question; does anyone know or have used a practitioner?
Thank you

yes. But your creditor has a say in which insolvency practise is used.
You DON'T have a choice.

Talk to the creditor. Or follow the guide I linked.

[northernladuk]

Wouldn't Maslins be able to do this if they are MVL experts? Or is it a different beast?

Is this loan a scheme loan? If so might be worth asking in the HMRC Scheme threads as well.

[creativity]

why?

It's insolvent. Unless you've been a naughty boy it's not your concern. Or necessarily your choice.

try this
https://www.citizensadvice.org.uk/Gl...pany-pdf-5.pdf

I am after a licensed insolvency practitioner as my company will be insolvent and has debt in the form of a loan.
It's a legal process that requires the use a licensed insolvency practitioner, hence my question; does anyone know or have used a practitioner?
Thank you