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Compulsory Liquidation > What
are the alternatives to compulsory liquidation?
There are 3 possibilities:
- Informal arrangement - the company
could consider writing to all its creditors to see if a mutually
acceptable agreement can be reached. It is advisable to include a
timetable of when payments will be made.
- Company voluntary arrangement (CVA) -
this is a formal version of the arrangement described above. The
directors would need to apply to the court with the help of an
authorised insolvency practitioner, who would supervise the
arrangement and pay the creditors in line with the accepted
proposals.
- Administration - this is a court
procedure that gives the company some breathing space from any
action by creditors. A court can grant an administration order to
enable the company to:
- survive, in whole or in part, as
an ongoing business;
- organise a voluntary arrangement
or compromise with its creditors;
- get a better realisation of assets
than would be possible if the company went into liquidation.
The procedure is managed by an
administrator, who must be an authorised insolvency practitioner.
Further information
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