subject: Advantages And Disadvantages Of A Company Voluntary Liquidation [print this page] A company voluntary liquidation offers advantages and disadvantages. It is important that company directors consider the pros and cons of liquidating a company before entering the process. Whilst the process may feel like the best option, there may be alternative routes that will be more beneficial to the company.
A Company Voluntary Arrangement (CVA) can be advantageous to companies that wish to bring their company to an end quickly, particularly those that go through a Members Voluntary Liquidation. This process, with the help of a liquidator, usually runs smoothly and ends with the winding up of the company, allowing all those involved in the company to move on. However, if the company directors are unable to pay off any debts after declaring themselves solvent, then they may face penalties and the process will take much longer.
A Creditors Voluntary Liquidation is an ideal process for companies that wish to avoid hassle from creditors. The liquidator deals with the creditors directly, allowing company directors to avoid any further problems. However, this may provide disadvantages for company directors, as the process involves a thorough investigation of the companys affairs.
Entering company voluntary liquidation means that the company is no longer able to continue business, which can often be disheartening for some company directors. In this case, the company may wish to look at alternative routes that will allow the company to remain in business whilst paying off creditors. A financial advisor will be able to provide information on different procedures, allowing the company to consider other options available. Taking an alternative route may not only be beneficial to the business, but also to all those working there. Informal arrangements can help the company to get back on its feet and allow all employees to remain in work.
