How To liquidate A Company?
If you are not sure What a Company Liquidation is, then watch the video below or scroll down to read…
|By the end of this short video you will understand:
What Does Company Liquidation Mean?
A Company Liquidation is a formal procedure whereby a liquidator is appointed to ‘wind-up’ the affairs of a limited company, which involves selling the company’s assets and paying creditors. When all the assets have been sold and the money distributed, the company is dissolved, which means that it no longer exists.
There are two ways to liquidate a company:
- A Compulsory liquidation of a company: this is where someone, usually a creditor, presents a winding up petitionto the court and gives evidence that they are owed money which the company cannot pay, and so the court makes a winding-up order. The Official Receiver is normally appointed as the liquidator of the company. It is usual for company directors to seek professional advice from an Insolvency Auditor to explore options open to the company when a winding up petition is issued, once a winding up order had been issued then it is too late and costly to reverse the situation.
- A Voluntary liquidation of a company: this is where the directors of the company decide to put the company into liquidation, usually because the company cannot pay its debts, and an insolvency practitioner is appointed liquidator of the company.
Cost For A Company Liquidation?
If you want to put a company into compulsory liquidation, you have to pay £715 deposit to the court, plus a £190 court fee, plus the cost of advertising the petition in the London Gazette and any costs of instructing a solicitor. If you want to put a company into voluntary liquidation, the costs vary depending on which insolvency practitioner you use.
If the company has debts you can not liquidate a company by your self, you must appoint an insolvency practitioner who is an officer of the court who can handle the liquidation. Before setting out you as a director need to speak with an Insolvency Auditor to explore other options open to the company and to safeguard the directors from wrongful trading and director disqualifications. A good Insolvency Auditor will explain all this to you before any liquidation takes place.
The forms to put a company into compulsory liquidation can be found on the website at http://www.insolvency.gov.uk/ in ‘Forms’ and then ‘Forms for England and Wales’. Alternatively you can complete the winding up petition online via the Online Forms Service by going into ‘Do it online’ on the website. Or speak with an insolvency auditor who will guide you with the winding up petition.
What happens to the company directors?
When a company goes into liquidation, the directors cease to have control of the company, and the liquidator steps into the shoes of the former company directors. The directors have a duty to co-operate with the liquidator to identify all assets and liabilities of the company and provide details of its affairs. The liquidator has to make a return under the Company Directors’ Disqualification Act 1986 about the directors’ conduct in relation to the company.
In voluntary liquidations, the liquidator is an insolvency practitioner (IP), and the Official Receiver has no involvement. In compulsory liquidations, the Official Receiver is usually appointed liquidator on the making of the winding-up order. In addition to his responsibilities as liquidator, the Official Receiver has further statutory duties, which include investigating the company’s business and the conduct of the directors activities and reporting to creditors.
The Official Receiver also decides whether to call a meeting of creditors in order to appoint an IP as liquidator in his place – if an IP is appointed liquidator in the place of the Official Receiver, the Official Receiver still retains his investigatory and reporting duties, into the company and the directors.
There are cases where an IP is appointed liquidator on the making of a winding-up order, and in such cases therefore, the Official Receiver only has investigatory and reporting duties.
If you still need further information on this go visit www.insolvency.gov.uk or seek advice from an Insolvency Practioner.
You may also call our Insolvency Helpline for more options on 0800 24 0800
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Insolvency Advice From The UK’s Leading Expert
Moe Nawaz (as seen on T.V.) is a nationally recognised insolvency auditor who has focused on providing to business owners and company directors for over 20 years. He regularly travels the country assisting company directors on how to handle their toughest cases with the Inland Revenue, Customs and Excise and other creditors. Moe is highly ranked among the top insolvency auditors in the country, with two books to his credit as an author “The Insolvency Survival Guide For Businesses” and his second book “Bankruptcy Guide”. With clients from Scotland through to Devon Moe enjoys travelling to meet his clients, he has what it takes to solve your tax or VAT problems for your company no matter where you live in the United Kingdom. If you would like more information about his practice and how he can help you, please call his office on 0800 24 0800 or contact him via email.
Moe Nawaz – Author – Speaker – Insolvency Auditor – Business Coach
Filed under: LIQUIDATION
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