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

• You can find further information on the alternatives to compulsory liquidation in the publication ‘Dealing with debt – how to wind up your own company’.
• If you feel that your business might be in financial trouble or would like to undertake a quick ‘healthcheck’ for your business then the Small Business Service has an online diagnostic tool that may help you. The tool is principally aimed at the self employed but can be used by those with a small limited company