Liquidation can be a complicated process for both solvent and insolvent companies, requiring input from several parties and with several possible outcomes. With these, some company directors wanting more control over the process may ask: ‘Can I liquidate a company myself?’
What is liquidation?
Liquidation is the name given to several formal insolvency procedures designed to close a limited company. Both solvent and insolvent companies can undergo a liquidation, although different dedicated processes exist for both scenarios.More on liquidation and company closure
Can I liquidate a company myself?
You can’t liquidate a company by yourself. The formal insolvency procedures required in liquidation must be carried out by a licensed insolvency practitioner (IP). IPs are regulated by the statutory regulations of the Insolvency Act 1986 and Insolvency Rules 1986. IPs must follow these regulations during their work.Duties of a licensed insolvency practitioner
How we can help close your company
If you wish to close your company, whether it’s solvent or insolvent, speak to us today. We have a highly experienced team of licensed and regulated insolvency practitioners, and our initial advice team can offer tailored, free, impartial advice with no obligation. We can assess your company’s circumstances and guide you through the procedure best suited for your situation.
- Closing a solvent company via Members Voluntary Liquidation
If your company is solvent and you wish to close it and receive the benefits of Business Asset Disposal Relief, you can explore a Members Voluntary Liquidation (MVL). Best suited for companies with more than £25,000 in assets, the process can offer a fast, tax-efficient and low-cost way for you to close a company.
More on Members Voluntary Liquidation (MVL)
- Closing an insolvent company via Creditors Voluntary Liquidation
Insolvent companies, unsuitable for administration or unable to repay their debts, can close via a Creditors Voluntary Liquidation (CVL). The process allows insolvent companies to close in an orderly manner, stopping creditor pressure and legal action, allowing employees to claim redundancy, and directors to move on.
More on Creditors Voluntary Liquidation (CVL)
Both solvent and insolvent companies can enter liquidation, either because they’ve come to the end of their useful lives, or their debts are becoming unmanageable. However, you cannot liquidate a company, solvent or insolvent, by yourself. Liquidations must be carried out by licensed and regulated insolvency practitioners. If you want or need to put your company into liquidation, speak to us. We have a highly experienced team of IPs who can advise you of the best course of action based on your company’s circumstances.
Can I close a company myself?
If the company has no creditors, has the cash reserves to cover all its remaining liabilities, but wouldn’t benefit from Business Asset Disposal Relief offered by an MVL, the director can close the company by striking it off via a dissolution. Dissolving the company removes it from the register at Companies House. It can be of benefit to a company that has reached the end of its useful life or if the directors want to retire.
What happens after a company liquidation?
In most circumstances, once the company is closed, it ceases to exist, and the associated debts die with it. Barring any personal guarantees or the liquidator uncovering any evidence of wrongdoing, the company’s unrepaid debts won’t affect the director, thanks to the company’s limited liability protection. Often, directors can start a new limited company after the closure of the old one should they wish to.
What can happen after liquidation
Can my creditors liquidate my company?
If your company is struggling to repay its outgoings when they fall due, your creditors can take action to recover what you owe them. One of the most severe forms of debt recovery is a winding-up petition, which creditors can apply for if the company owes them more than £750. If carried through, the petition can become a winding-up order, freezing the company’s bank accounts, making trading impossible, and forcing the company into compulsory liquidation.
Winding-up petitions and compulsory liquidation
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