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What is Insolvency Without Clearing the Assets ?

Itu2019s hard enough coming to terms with the fact that, as a company, you are struggling with debts and have been classified as insolvent. Usually a Creditors Voluntary Liquidation (CVL) is the right option and if the company has assets it can sell, i.e. machinery, equipment or even premises, they can be sold to pay creditors. But what happens if there are no assets that can be realised? Does a CVL still apply? Who pays the insolvency practitioneru2019s (IP) fees?

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What is Insolvency Without Clearing the Assets ?

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  1. WHAT IS INSOLVENCY WITHOUT CLEARING THE ASSETS ?

  2. INTRODUCTION LEADING CORPORATE RECOVERY It’shardenoughcomingtotermswith thefactthat, asacompany, youare strugglingwithdebtsandhavebeen classified as insolvent. Usually a CreditorsVoluntaryLiquidation (CVL) is therightoptionandifthecompanyhas assetsitcan sell, i.e. machinery, equipmentorevenpremises, theycan besoldtopaycreditors. Butwhat happensiftherearenoassetsthatcan berealised? DoesaCVLstillapply? Who paystheinsolvencypractitioner’s (IP) fees?

  3. CLAIMING REDUNDANCY FROMTHE NATIONAL INSURANCE FUND Youmusthavebeenworkingasa director with a contract of employmentforaminimumoftwo years, i.e. youareanemployee. The contractcanbewritten, oralor implied. Ifyouhavebeenworkingon thebasisofhavingacontrolling interest, youarenoteligible. Youmustbeworkingforaminimum of16hoursperweek Thecompanymustoweyoumoney, suchasPAYEarrearsoryourinitial investmentintothecompany

  4. HOWMUCH REDUNDANCY AREYOU LIKELYTO RECEIVE? Thelevelofredundancyyouare likelytoreceivedependsona numberoffactors, suchashow muchyouarepaid, howlongyou havebeenanemployeeofthe companyandyourage. Allthefactorsusedtocalculatehow muchredundancyyouwillgetare capped: Grossweeklyrateofpayiscappedat £525perweek Lengthoftimeinemploymentwith theinsolventcompanyiscappedat 20 years, but you must have completedaminimumoftwoyears.

  5. WHENWOULD INOTBE ELIGIBLEFOR A DIRECTOR REDUNDANCY CLAIM? Thedirectorisnotanemployeeof thecompanyanddoesnothavea regularsalarythatispaidviaPAYE Thecompanyhasbeenalimited companyforlessthantwoyearsor thedirectorhasnotbeenworkingat thecompanyformorethantwo years Thecompanyhasbeendissolved ratherthanliquidated. Ifyouhave struckoffyourcompanyratherthan liquidatedit, whichisacheaper option, directorsarenoteligibleto claimredundancy.

  6. GETINTOUCH WITHUS MAILINGADDRESS NorwichNR21SN, UnitedKingdom PHONENUMBER +448002461845 E-MAILADDRESS mail@leading.uk.com WEBSITE www.leading.uk.com

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