How to liquidate your manufacturing company in the UK
Manufacturing is a key industry for the UK economy, supporting global exports while also employing a huge number of people in the nation, including company directors and shareholders. Technological advancements, such as robots and artificial intelligence, make it an appealing alternative for new workers, with process planning and company assets being significant areas of growth.
Attracting fresh talent into manufacturing isn’t always simple, given the scarcity of workers with the necessary expertise, which can be a critical concern for company directors. This and other difficulties pose a danger to the success of certain UK manufacturers; what other obstacles are causing instability in the sector?
What are some of the issues facing the UK manufacturing industry?
Green sustainable development objectives
Reducing waste and implementing novel, greener production processes necessitates a large investment, which some industrial enterprises or a limited company may be unable to afford.
Affordable premises
Manufacturing often needs larger-sized facilities for all the machinery and equipment needed for company assets. The cost of leasing space and the accompanying expenses, such as business taxes and electricity, might be prohibitively expensive for a limited company.
How to liquidate a manufacturing business in the UK?
When a company falls bankrupt, subject to the circumstances, it might be able to restore its footing through official means. If this is not attainable, compulsory liquidation will most likely be the only choice.
Liquidation is the process of realising assets and winding up business affairs prior to closure, however there is also a liquidation method that is routinely employed for financially strong industrial enterprises.
What does liquidation mean for bankrupt manufacturers?
Creditors’ Voluntary Liquidation (CVL) is a formal procedure that a corporation must follow if its debt is unmanageable. Its primary goal is to prevent creditors from additional financial damage and close the limited company down.
To do this, corporate assets are offered for sale at a liquidation auction, and as manufacturing often employs high-value assets, this can produce cash to pay unsecured creditors a return.
Directors are also immune from claims of unlawful trade if they seek expert advice, such as from McLaren Insolvency Practitioners, as soon as possible after voluntarily placing their firm into liquidation. An additional advantage for company directors joining CVL is the ability to claim redundancy compensation under specific situations.
The CVL procedure goes as follows:
A meeting of shareholders is convened, and 75% (by value) must agree to adopt a winding-up resolution.
A licensed insolvency practitioner is formally appointed to liquidate the firm.
The winding-up resolution is forwarded to Companies House and advertised in the Gazette.
A creditors’ meeting is scheduled within 14 days following the resolution. This meeting must be publicised in the Gazette.
At the creditors’ meeting, a Statement of Affairs is provided, which details the company’s financial status. This will additionally be forwarded to the Companies House.
During the liquidation process, creditors’ interests take priority over those of directors, shareholders, and members. Directors must behave with honesty and give the IP with all the necessary information to complete this process.
What exactly does liquidation mean for solvent manufacturing businesses?
Members’ Voluntary Liquidation is the process of liquidating the assets of a solvent limited company and closing it. This is an excellent alternative for company directors whose businesses have distributable profits of £25,000 or more.
Distributions are subject to Capital Gains Tax (CGT), and if a company director is qualified for Business Asset Disposal Relief (BADR), their tax burden may be lowered to a 10% effective rate.
The MVL procedure
Employ the services of a skilled insolvency practitioner to provide guidance and supervise the process
Hold a board meeting to examine voluntary liquidation as a possibility.
The majority of directors sign a Declaration of Solvency, which confirms that the business can repay all of its obligations within 12 months of the liquidation date.
A Liquidator is chosen during an Extraordinary General Meeting of shareholders, when a resolution is voted to wind up the firm if 75% of shareholders (by value) agree.
The liquidator sells the company’s assets, pays all creditors in full, and distributes any residual money to the owners.
How can insolvent manufacturing businesses be saved from liquidation?
If a licenced insolvency practitioner (IP) feels the firm may be saved, one alternative for recovery is to legally restructure obligations with creditors to a reasonable amount, thus preserving the company assets.
Other options include going into business administration, but choosing the correct form of financing may also help them achieve financial security. McLaren Insolvency Practitioners can swiftly give dependable expert advice to directors of UK manufacturing enterprises and assist them in determining the best course of action.
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HMRC debt can cause a significant strain on business finances. If ignored HMRC can often instigate winding up action. As a Director you should contact a licensed practitioner before this happens to ensure you are protected.
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Navigating the complexities of government-backed loans, such as bounce back loans, can be overwhelming. Our experts are here to guide you through the process, helping you secure the financial assistance your business needs.
Why Choose McLaren Group?
Expertise
Our expert team offer director focused liquidation solutions. Helping with Bounce back loans, HMRC debts, supplier debts and much more. We understand the challenges many company directors have had since covid and provide tailored solutions to suit your situation.
Personalized Service
We believe in a client-centric approach. Every business is unique, and we tailor our services to meet your specific needs and goals.
Results-Driven Approach
We focus on delivering tangible results and will support you through the full process of closing your company. We offer a simplified director focused liquidation which will ensure your personal credit isn’t impacted.
Save Time and Resources
Our fully qualified team of Insolvency experts will help take the strain of creditor pressure away. Save you time & resources by contacting any creditors on your behalf and ensuring you get the right advice on closing your struggling company.
PREMIUM SERVICES
Our Services
Bounce Back Loans Assistance
If you're struggling with repayments or have questions about your Bounce Back Loan, we're here to help. Our experts will guide you through the process and explore options tailored to your specific circumstances.
VAT Debt Resolution
Unresolved VAT issues can be a significant burden. Our experienced team will work tirelessly to find the best solutions for your VAT-related challenges.
HMRC Debt Support
Dealing with HMRC debt demands can be daunting. Our experts will negotiate with HMRC on your behalf, helping you find manageable solutions and preventing further financial strain.
IR35 Compliance
Understanding and navigating IR35 regulations is crucial for contractors and businesses. We offer comprehensive guidance to ensure compliance, minimizing potential penalties and liabilities.
Winding Up Orders
Facing a winding-up order can be distressing. Our dedicated team will help you explore all available options, potentially saving your business and livelihood.
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Don’t let financial challenges hold you back from your business goals. Reach out to McLaren Insolvency Practitioners Glasgow today to discuss your specific needs and discover how our comprehensive services can help when you are struggling with business debts.
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ICO. Registration reference: ZB590513
Company Number: SC727432
Penny McCoull is licensed to take insolvency appointments in the United Kingdom for McLaren Insolvency Practitioners Ltd by the Institute of Chartered Accountants of Scotland. Her Office Holder number is 9544.
© 2024 - McLaren Insolvency Practitioners | All rights reserved
Privacy Policy | Complaints Policy | Provision of Services
ICO. Registration reference: ZB590513
Company Number: SC727432
Penny McCoull is licensed to take insolvency appointments in the United Kingdom for McLaren Insolvency Practitioners Ltd by the Institute of Chartered Accountants of Scotland.
Her Office Holder number is 9544.
