Insolvency law (chiefly the Insolvency Act 1989 ["the Act"]) governs how companies go out of business or recover from crippling debt. 

 An insolvent company, ("the debtor"), might use either an Administration Order or a Company Voluntary Arrangement ("CVA") to "reorganise" its business and try to become profitable again.

Management continues to run the day-to-day business operations in the case of a CVA and an Administrator appointed by the Court will run a company in the case of an Administration Order.

If a company goes into liquidation either voluntarily or is formally wound up by the Court, the company stops all operations and goes completely out of business. A liquidator may be appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors.

Alternatively and finally the debtor may have an Administrative Receiver ("a Receiver") appointed under a floating charge.

Moe Nawaz
My Twitter profileMy Facebook profileMy Google+ profile

Moe Nawaz

Moe Nawaz, has been engineering strategies for struggling businesses & making good businesses great since 1989. “Whilst my competitors are very good at what they do, I have a much greater commitment to finding strategic solutions quickly, easily, safely, enjoyably and more predictably than any of my rivals.” “I am better at both minimising your liabilities and maximising your gains. I can also show you more legal and ethical short cuts, quick fixes and fast track strategies than anyone else operating in this marketplace”.(read more about Moe Nawaz).

Filed under: INSOLVENCY

Like this post? Subscribe to my RSS feed and get loads more!