The up front cost of a typical CVL usually ranges from £3000 to £7000, depending on the insolvency practitioner’s rates and the amount of work involved.
However you should be aware that if the company's assets are sufficent to meet these up front costs then the directors should not have to make a personal contribution.
After the company ceases trading and is liquidated all brand recognition will be lost, so all marketing efforts in the history of the company will have been in vain.
For this reason a CVL should be considered as a last resort, only after alternative options that would allow the company to continue trading have been examined (i.e.
– pre-pack administration, company voluntary arrangement (CVA), or asset financing).
After every liquidation process the liquidator is required to investigate all actions taken by the directors while the company was trading insolvently.
Liquidation is a formal insolvency procedure in which a company is brought to an end; all of its assets are liquidated and the proceeds from the sale of assets is used to repay creditors.
There are two main types of liquidations for insolvent companies– compulsory liquidation and creditor’s voluntary liquidation (CVL).