UK company liquidation and the steps for company liquidation is a very detailed process with steps that must be followed as per the rules and regulations. This means that you cannot decide to go into voluntary liquidation and handle the process yourself, you need an authorised and licensed insolvency practitioner to handle the process on your behalf, ensuring that every step is completed and that you close the company properly.
It is imperative for a company director to understand the process of liquidating a company. When it comes to closing down your business for good due to financial problems, ensuring that the company is wound up properly can reduce the risk to you. It is also important that you take the time to identify what the liquidation of a company means for you as the director. How it can affect you in the future and how you can be held accountable if you don’t provide accurate information when requested.
Whether you have found your company to be struggling financially with no way of turning it around and are looking at voluntary liquidation, or whether you are being forced into liquidation by your creditors or HMRC, it is not a pleasant experience. The liquidation of a company can be a stressful and daunting process whether you’re the director, an employee or you have signed a personal guarantee for a company which has found itself in financial difficulty.
When it comes to voluntary liquidation of a company, it is imperative that you get the consent of all the shareholders. A shareholders meeting should be held immediately to discuss the options and make the final decision. Once liquidation of a company is decided, the shareholders have the ability to vote for their own insolvency practitioner to handle the process. The insolvency practitioner becomes the actual liquidator at the meeting of creditors when voted in and approved by the creditors.
In the event of a compulsory liquidation, it is your creditors who force the liquidation of your company, and the final say as to who will wind up the company. An insolvency practitioner once they become the liquidator will take over complete control of the company from the minute the liquidation process starts. They will have the final say as to whether the company continues to trade or whether it closes its doors immediately.
As the company director, you will remain in office with limited power over the future process taken. Your responsibility will be to furnish the insolvency practitioner with everything they need to liquidate the company in the shortest period of time. It is important to note that the liquidation of a company can take months, maybe even years. The liquidator will start by selling all the company assets and collecting the money.
During this stage, they will also collect all the creditors claim forms and if the business has been closed with immediate effect, they will also collect all the employee claim forms, while ensuring that where appropriate all services to customers have been fulfilled. It is the responsibility of the insolvency practitioner to ensure that each creditor and employee claim is verified. They will go through all the accounts and finances to verify the amounts, ensuring that all secured debts are settled before anyone else.
After secured debts, employees will be paid amounts owing to them and then the unsecured debts. The liquidation of a company is a detailed process and the insolvency practitioner will have to ensure they abide by all the rules, paying due care to the creditors at all times. Once all bills have been settled, they then dissolve the company and it is removed from the Register of Companies.
UK company liquidation focuses on helping businesses facing financial difficulties. This company comprises of a dedicated team of experienced professionals who help directors identify a clear path on how to proceed when faced with serious financial issues. Insolvency companies put company debt solutions as their number one priority while protecting the director as much as possible and still ensuring due care to creditors.