Heskin Office
Manchester Office

Corporate Insolvency


What are the options available to a company when faced with insolvency?

The most common routes available when facing financial problems and the restructuring of the business are Administration, Company Voluntary Arrangement (CVA) or Liquidation (CVL). The choice can be difficult and giving advice is also difficult without being given all the facts at the time. In an attempt to make the choice easier here is a brief appraisal of each option.


When a company is insolvent and facing pressure from it’s creditors, disputes and/or financial, it may enter the administration process.

During this process, the director(s) lose control of the business and the Administrator takes over control and becomes responsible for the day to day running of the business.

Administration buys a company time to address it’s problems and seek a way forward to it’s financial turnaround.

The Administrator must have a purpose and under current rules the process can last no longer than 12 months without approval of it’s creditors or court.


Liquidation (CVL) Creditors Voluntary Liquidation

CVL is a procedure in which the director(s) have determined that the company is insolvent. At the board meeting it is passed that a licensed Insolvency Practitioner be instructed to assist the company to call a meeting of it’s creditors for the purpose of ratifying their choice of liquidation.

The proposed liquidation is responsible for safeguarding the assets of the company and the subsequent distribution to the said creditors.

This process is widely used when the company’s liabilities exceed the assets.

The process from the board meeting to the creditors meeting is usually 21 days although with the shareholders agreement it can be done under short notice.

Company Voluntary Administration (CVA)

A CVA is a procedure to help a company to address it’s current financial difficulties. It is an arrangement between the company and it’s creditors.

The procedure is implemented under the supervision of a Licensed Insolvency Practitioner who in his capacity as Nominee puts the company’s proposals to its creditors’. Should these proposals be agreed the Nominee then takes up the supervision of the arrangement.

Choosing the option that is best suited for you.

We are here to help you with this decision, call one of our advisors today as time is of the essence should you seek a positive result to your problems.


Insolvency Statistics 2015
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Saturday, 25 May 2024