Why is DIY The Wrong Way To Liquidate Your Company? - The legalities aside, It's a huge risk to take...
What do you do if you cannot afford to liquidate your company? Sometimes if your business has not been turning over a profit you may feel you cannot even afford to Liquidate your company. When your business is insolvent it can be very stressful and people can often feel they have no options, however, at Lines Henry, we put business recovery first and then look at the most tangible options for your company.
How to Liquidate my Company when I am not making any money?
You may feel that you cannot afford to liquidate your company, but in reality, you may have more options than you realise. Liquidation is just one avenue of insolvency, it is a common way of winding down a company but depending on your own circumstances there may be a number of different options for you. As a limited company it is your company that is liable for any money owed and if you can afford it, then it is better to start insolvency proceedings yourself such as creditors voluntary liquidation.
Other options include Administration and Liquidation with assets. It is very likely that your company will have assets, if so these can be sold off to pay back creditors, there are other options for liquidation without assets. If you really cannot afford to liquidate your company then here is some advice; If you or the company cannot afford the costs of liquidation there are two options: The company could simply stop trading and not enter into insolvency proceedings. It would then be for one of the creditors of the company to decide whether they petition for the winding up of the company. Or the company could stop trading and then the directors apply for voluntary dissolution. A private company may apply to the Registrar of Companies to be struck off the Register under section 1004 and 1005 of the Companies Act 2006. This is not an alternative to formal insolvency proceedings, and creditors may prevent the striking off. Even if the company is struck off and dissolved, creditors and others could apply for the company to be restored to the Register.
