• Company Liquidation Advice

Advice on company Liquidation

Does your business have mounting debts that it is struggling to pay or is it suffering from the loss of a major customer which has resulted in a bad debt and/or the loss of a significant amount of turnover? If you recognise these issues, you should take advice on Liquidation from an experienced practitioner in corporate insolvency and recovery.

Directors’ responsibilities when faced with these difficulties can be a minefield. Mistakes can be very costly, impacting on directors personally. If you need to take advice on the issues facing your company and/or you as a company director then call us now.

We have many years’ experience in dealing with corporate insolvencies and company rescue and recovery – taking early advice can sometimes mean that formal insolvency can be avoided and your company can be saved from closure. We can help you overcome short term difficulties in your company or help you deal with the formalities associated with the closure of a company if your company has come to the end of its useful life.

We can also offer advice and guidance if you have received a Winding Up Petition from one of your creditors and you want to avoid Liquidation. Time is of the essence and the earlier you take advice then the more options are generally available to you. It can be daunting to see a business that you have worked hard to establish, and perhaps have made a major personal investment in, face failure - but the earlier advice is sought the more opportunity there is to salvage or save some or parts of the company.

We can help you and your business whether you want to close your business or rescue it from closure. Call us now on 029 2035 1490 or enquire online for experienced, confidential Liquidation advice.

How does a company enter Liquidation?

There are two main ways a company can enter Liquidation:

  1. Voluntary Liquidation – Where the shareholders of a company decide to put the company into Liquidation. This can happen when the business is solvent (i.e. has enough money and assets to pay all debts) and is then known as a Members’ Voluntary Liquidation) and if your company is unable to pay its debts (is insolvent) is known as a Creditors’ Voluntary Liquidation.
  2. Compulsory Liquidation – Where creditors apply to Court for a company to be wound up following the non-payment of its debt.

Whether your business is being forced into a Compulsory Liquidation, or you have decided to take control and close the company down yourself then we are here to offer guidance and support throughout the entire process.

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What is the procedure for a Members' Voluntary Liquidation?

The procedure for a Members' Voluntary Liquidation is fairly straightforward. The directors of the company swear a Statutory Declaration of Solvency to the effect that the company is able to pay all its liabilities in full within 12 months. A meeting of the shareholders is convened in order to pass a winding-up resolution and appoint a Liquidator.

The duly appointed Liquidator then realises the company's assets, pays all creditors together with statutory interest and returns any surplus money to shareholders.

How does a Creditors’ Voluntary Liquidation work?

A Creditors’ Voluntary Liquidation is an insolvent Liquidation where the assets owned by the company are insufficient to pay creditors in full.

Again, the procedure is fairly straightforward. The directors instigate the process by convening meetings of shareholders and creditors. At the shareholders’ meeting a resolution is passed to wind-up the company and appoint a Liquidator. A creditors’ meeting follows immediately after the shareholders’ meeting where creditors may then, if they so wish, put forward an alternative nomination for Liquidator which is then subject to a vote.

Please note that even if entering liquidation isn’t the most suitable way out of your financial difficulties then we are still able to help. We deal with company debts of all types and can assist with business recovery, administration, receivership, etc.

What is Compulsory Liquidation?

Compulsory Liquidation is instigated by the Court, usually on the petition of a creditor or a shareholder. There are grounds upon which the Court can make a winding-up order, the most usual being that the company is insolvent.

Upon the making of the winding-up order, the Official Receiver becomes the Liquidator of the company. If appropriate, the Official Receiver will seek to appoint an Insolvency Practitioner as Liquidator in his place, either at a meeting of creditors or upon application to the Secretary of State.

The Liquidators’ duty is to realise a company's assets and distribute the proceeds to creditors.

The Insolvency Practitioners at Jones Giles & Clay can act as Liquidator during your compulsory liquidation.

As a director, how will company liquidation affect me personally?

If it is deemed that you have acted in a proper and reasonable manner in the period running up to the Liquidation then Liquidation should have minimal effect on you personally. A limited liability company means that, as a director, your personal liability for business debt is small or non-existent.

If however, you have signed personal guarantees in respect of any of the company debts, then you may be liable for those debts. If it can be proven there was ‘wrongful trading’ in the period running up to the Liquidation, then your personal risk will be increased. You may have also borrowed personally to put money into the business, and if your on-going income is at risk this may lead to personal as well as corporate insolvency issues. There are a number of personal insolvency solutions available to you – including an Individual Voluntary Arrangement or Debt Management Programme.

If your company is struggling then we can offer you advice and guidance on how to minimise any risk to you personally. It is vital that you take early advice so contact us now on 029 2035 1490.

What is wrongful trading?

A director may be held responsible for wrongfully trading a company in the period running up to the insolvency of a company if:

  • Further debt is incurred when there was no reasonable prospect of the company recovering from its difficulties
  • Money rightfully due to HM Revenue & Customs being used to fund on-going trading activities when there was no reasonable prospect of recovery
  • Taking large salaries which the business cannot afford

I need company Liquidation advice. What are the next steps?

Simply call us on 029 2035 1490 or fill in our online enquiry form and we will call you back.

Advice Line: 029 2035 1490

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