There are advantages to a viable but insolvent business being saved through the creation of a Phoenix Company, but there...
It’s a fair question. Perhaps you’re thinking of saving money by attempting to liquidate your company yourself rather than paying for the services of an Insolvency Practitioner.
Living in the information age is a wonderful thing, there’s never been an easier time to get quick access to knowledge and experience online, which can allow you to do things for yourself you might have previously had to hire someone to do for you. In many cases this is a great way to both save money and learn new skills, however, in other cases it’s not so advisable and company liquidation is most certainly one of the latter.
Why is ‘DIY’ The Wrong Way To Liquidate Your Company?
When searching for anything online, there’s often an unconscious bias to gravitate towards ideas and opinions which we already hold. If you start a search for whether or not you can liquidate your company yourself, you will inevitably find people who express the opinion that you can, but bear in mind that while they’re entitled to their opinion, they’re also very wrong. But unlike a Licensed Insolvency Practitioner, these people cannot be held accountable for giving you bad advice.
Bear in mind that liquidating a company is a formal legal process and like most formal legal processes, liquidation must be overseen by someone who has been formally certified and qualified to do it. There is a set procedure for liquidating a LTD company. If the business is solvent the process is much simpler, but even so, must be done in the right way.
If the business is insolvent, then matters become more complicated and you should bear in mind that the protection afforded to company Directors by a company’s LTD status may not apply if they are found to have acted improperly. Trying to liquidate your company without an Insolvency Practioner being involved could result in you becoming personally liable for the company’s debts, being banned from acting as a director or even prosecution. These are huge risks to take for what will almost certainly be a negligible return and the constant worry about being ‘found out’.
Think of it in the same way as servicing your gas boiler. You could probably watch a youtube video to find out how it’s done and you might even do it right, but it’s a huge risk. You may, for example, end making a mistake that costs you your house (or more) and of course, anyone servicing a boiler who isn’t ‘Gas Safe’ registered is breaking the law.
Looking to Liquidate Your Company? Call Us First
Liquidating your company might not be as expensive as you think and it’s important to bear in mind who actually pays for it as this is probably what’s caused you to ask if the DIY approach is possible in the first place.
Insolvency Practitoner fees are taken from the liquidated assets of the company rather than the Director, so in the event of an insolvent liquidation, it is the creditors who effectively pay for the liquidator.
In the first instance, the best thing you can do is to contact Lines Henry for a consultation which costs nothing at all and we can give you proper advice and reassurance as well as guiding you to making the best choice for you and your business in your own unique circumstances.