Tuesday, August 14, 2012
What Is A Corporate Liquidation?
The last quarter of 2008 saw 3, 000 companies go into business liquidation and this was a sixty two percent rise on the last quarter of 2007. Two thousand companies went into administration during the very same quarter. This sharp increase is extremely marked, and reflects the fact that the costs of organization with pre pack liquidation have gone down a good deal; in fact it had been a very rarely used process prior to the decade before that, again primarily due to expense.
It is less costly these days as bankruptcy practitioners and associated professionals have lowered their fees in line with new, simplified procedures which have recognized the need to preserve businesses rather than lose viable going concerns where they could be saved in some form. The old troublesome procedure is no longer anywhere near as prolonged or as expensive, and the rise in the relative numbers of businesses entering corporate liquidation has been in large measure due to that.
Professionals and companies alike now realise the significance of things like pre-pack administration to maintain assets, directors' remuneration and also employee's jobs as part of a corporate liquidation. The significance of preserving as much of a company as possible is recognised as important in assisting to preserve the business, albeit sometimes in a different form and sometimes like a new legal entity (often with the unprofitable parts sold off and also the old debts written off). Such 'phoenix companies' are actually more and more abundant. It is also recognised that it is the way ahead for preserving local communities where employment is really a key part of local stability and prosperity. And one should not forget the significance of continuity through the eyes of the suppliers and the customers too.
Specialist legal providers in this field can setup a new company as needed, find the funding and draw up all the legal requirements without any cessation of trading: the new business will arise through the ashes of the old. They will have expertise by doing this which will ensure the least disruption of service from everybody's viewpoint.
The actual specialists can also provide funding to purchase new assets, if required, and part of that refinancing (including access to the best and cheapest sources of finance) could be used to fund the company liquidation by itself, so the costs from the liquidation won't be troublesome. Other things like company debts will likely be restructured or even partially or wholly written off so the new company may trade unhampered by its old financial obligations.
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