Liquidate my insolvent pub: Creditors’ Voluntary Liquidation (CVL)
Creditors’ Voluntary Liquidation is the procedure to use if you have insufficient funds to repay your creditors. It means that the business closes down in an orderly manner and you fulfil your legal obligations to creditors by prioritising their interests.
During a CVL your pub assets are placed for sale at a liquidation auction and the proceeds are used to repay creditors. A further benefit of entering this process is that misconduct allegations are less likely to be made against you as a director as you have taken the initiative by voluntarily placing your pub into liquidation.
Liquidate my solvent pub: Members’ Voluntary Liquidation (MVL)
If your pub business can pay all its creditors you may be eligible to enter the solvent liquidation process called Members’ Voluntary Liquidation. This ultimately closes the pub down by removing it from the register at Companies House.
Initially, the appointed insolvency practitioner liquidates your business’s assets and completes all the necessary administrative tasks required by the process. Due to its tax efficiencies, MVL is a highly advisable closure method if your business’s retained profit levels exceed £25,000.