How Do I Liquidate My Company?
“How do I liquidate my company?” This is one of the most common questions I get asked via email and by phone calls. There are a number of answers to the complicated question, each case is different but what I am going to describe is where the bulk of the answers to the question.
If your company has no creditors, in other words your company does not owe any money to anyone and your company accounts are up to date with companies house then you don’t need an insolvency auditor or practitioner to liquidate your company. You can go to companies house and ask them to remove the company from the register.
If your company has debts that have not been paid or you have ongoing court cases running then you will need the service of an insolvency auditor or practitioner to help you plan the best way forward for your company. These normally involve charges. If on the other hand you don’t have a viable business and loads of debts you can arrange a creditors’ voluntary liquidation to liquidate your company, this rout will also cost you money at a cost of £5,000 or more depending on how complex your case is. But if the company has no means of money to pay for the liquidation then the only other option open is to wait for one or a number of your creditors to apply to the courts to wind the company up which is the compulsory liquidation.
Most people have companies that have debts and they want to close the company down but can’t. The only way you can close a company down if it has debts is via a voluntary liquidation which you or your company has to pay for or allow the creditors to go down the court process for a compulsory liquidation.
Why should you pay for a liquidation rather than let creditors pay for it?
Depending on the number of creditors and the total amount of debts of the company and also who the money is owed to, is it to HMRC or suppliers and so on. This might well cause an investigation in to the affairs and conduct of the directors of the company to see if they acted in a manner fit to hold office as directors in the future and what they did to reduce the liabilities of the company. But if you appoint a practitioner to liquidate the company then you are in the driving seat to a degree which is better than not being in the driving seat if the creditors are running the show and possible pushing the investigation in to the conduct of the directors. If found that you were trading the company under wrongful trading the directors could face criminal charges as well as being banned for being company directors in the future.
Sometimes all it takes is a simple telephone call to make sure you are doing the right thing.
If you need professional help and advice to save your business from the storm, then give me a call on 0800 24 0800 and leave me a message with a brief description of the problems you are facing and the best time to call you back for private and confidential chat to see how we can assist you.