Being the Director of a liquidated company doesn't exclude you from statutory entitlements. In the right circumstances you can claim...
When a company is no longer profitable your best option may be liquidation, but you may ask yourself, how do I liquidate my company? Sometimes due to external circumstances your business becomes unprofitable. Ff this is the case you may need to consider winding up the company. The most straightforward way to wind up a company is to liquidate your company and assets. If your company is no longer solvent then there are two types of liquidation that apply to you, Compulsory Liquidation and Creditors Voluntary Liquidation. Compulsory Liquidation is when one of your creditors requests your company be liquidated to pay off debts, creditors voluntary liquidation is when the directors decide to wind up the company themselves. The liquidation process is fairly simple but you do need to follow certain steps and procedures, the easiest way to wind up your company is Creditors Voluntary Liquidation (CLV) as it is always better to initiate things yourself rather than let it get to the point where a creditor whom you owe money requests to start the liquidation process.
Liquidating your company
A common misconception is that you can liquidate an insolvent company your self, this is not the case you need to speak to an insolvency practitioner as soon as possible to facilitate the process and act as a go between for your creditors and yourself. The first step in starting a CVL is approaching an insolvency practitioner to facilitate the process. For an insolvent company that is trading, your insolvency practitioner will hold a creditors meeting, during this meeting your creditors will have to agree to the liquidation taking into account they may only recoup a percentage of what is owed. Most creditors will come to an agreement and your liquidation process can start. It is always better to start your own liquidation proceedings rather than wait for a creditor to start compulsory liquidation against you. This is because you will have more control over the insolvency practitioner appointed (unless your biggest creditor is a bank in which case they often have their own insolvency practitioners). It is also a lot less stressful to start liquidating your company yourself, think of those sleepless nights worrying about money and having no control. taking back control and liquidating your company is the first step towards starting afresh.
How much does liquidation cost?
Liquidation can be very expensive, which is sometimes why many people don’t initiate the procedure themselves. Depending on the size of your company the liquidation costs can be very high up to several thousand, these costs will be discussed in the creditors meeting as the creditors will need to agree these costs as it will affect the proportion of money they are paid back. At Lines Henry we start our liquidation proceedings from £2,500 + VAT. Sometimes Liquidation is not the only option, but you will not know until you speak to a licensed insolvency practitioner, the sooner you speak to someone the sooner you can get the advice that is right for you and in many cases, speaking to someone like Lines Henry early can save your business. How it works
- One of our specialists can provide you with professional advice and guidance
- We can help you decide the best course of action and make an informed decision
- We can liaise with your lenders to relieve pressure, stop legal action and freeze interest rates
- Contact us now for confidential expert advice… or one of our specialist advisers can call you