Corporate
There are five categories of insolvency procedure for companies in England, Wales and Northern Ireland. These are:
- Company Voluntary Arrangement (CVA)
- Administration
- Administrative Receivership
- Creditors’ Voluntary Liquidation (CVL)
- Compulsory Liquidation (winding up by the court)
Receivers may also be appointed under fixed charges (fixed charge receiverships) on specific assets owned by a company. These are not technically insolvency appointments as such appointments may be made irrespective of the solvency of the company.
There is also Members’ Voluntary Liquidation (MVL), but this only applies to solvent companies and is instituted by the shareholders. Companies involved in this procedure are, by definition, able to pay all their creditors, and are often wound up simply because they have outlived their usefulness. For information about the MVL process, contact us.
Insolvent partnerships in England, Wales and Northern Ireland are
subject to Compulsory Liquidation, not CVLs, but the partners, because
of the relationship between them and the partnership may individually be
made Bankrupt or enter
Individual Voluntary Arrangements.
In addition, a partnership may enter a modified CVA or an
Administration.
Of the above procedures, the first three may be used as vehicles for business rescue, whereas liquidation is a terminal process for the company and usually marks the end of the business activities as well.