Voluntary Liquidation Process: What You Need to Know
The phrase company liquidation is not one that any company wants to think about. But unfortunately there are times when business liquidation is necessary, largely because the company is no longer profitable and owes money to various creditors. If you find yourself in this situation it is important to learn as much as you can about the process, so you do not act more quickly than is necessary.
Are there different types of company liquidation process?
Yes there are, and this is one point that few people are aware of until they find themselves in a situation where liquidation is a distinct possibility. A company voluntary liquidation can take one of two forms. Firstly it can be a members’ voluntary liquidation, which means those in charge of the company decide to liquidate all its assets to pay the creditors. The second form of voluntary liquidation is called the creditors’ liquidation. This is still put into action by the shareholders but in this case the assets are not enough to cover the liabilities the company has.
The third type of company liquidation process is when the decision is made not by the company shareholders but by the courts. In this situation they create what is known as a winding up order. Once this happens the company directors have no choice but to go along with the court order.
Why is it important to seek limited company liquidation advice before acting?
There are plenty of professionals who provide a company liquidation service. It is vitally important not to act until you have sought the appropriate advice. This is because they will know about business liquidations in great detail. Since you would not need to know anything about them unless and until you find yourself in this situation, it makes sense to consult the professionals for advice.
For example in some cases you might think that voluntary company liquidation is the only way to proceed because you cannot see a way out. However a professional company liquidation Birmingham or London based expert might advise you to try and make a formal or informal arrangement with your creditors. In this case you might be able to agree a plan of action whereupon you keep your business and pay back your creditors over time. The other alternative is familiar to many and is known as going into administration.
In any event you can see that even when company liquidation is on the cards, all is not necessarily lost.
If you are not sure what is liquidation of a company then watch the short video below.
What is Liquidation of A Company?
Filed under: LIQUIDATION
Like this post? Subscribe to my RSS feed and get loads more!
