Company Liquidators in CleadonClear Guidance for Directors

A licensed insolvency practitioner acts as a liquidator, taking control of the company's assets, realising their value, and distributing the proceeds to creditors in the correct statutory order. They also investigate the directors' conduct and report to the relevant authorities if necessary.

The cost of liquidation varies depending on the complexity of the case, the size of the company, and the number of creditors. Fees are typically paid from the company's assets, but if assets are insufficient, directors may need to fund the process personally. Always obtain a clear fee quote upfront.

A liquidator can be appointed by the shareholders through a members' voluntary liquidation, or by creditors through a creditors' voluntary liquidation. In some cases, the court may appoint a liquidator following a winding-up petition. The specific circumstances determine the correct route.

A creditors' voluntary liquidation typically takes between six and twelve months to conclude, depending on the complexity of the case and the speed at which assets are sold. A members' voluntary liquidation can be quicker if all assets are realised promptly and there are no complications.

Once a company enters liquidation, the liquidator takes control and the directors' powers cease. Trading may continue only if the liquidator decides it is beneficial for the realisation of assets or the completion of contracts. Any trading after the resolution to wind up is subject to the liquidator's approval.

Voluntary liquidation is initiated by the directors or shareholders, whereas compulsory liquidation is ordered by a court, usually following a winding-up petition from a creditor. Voluntary liquidation is more common and allows directors to have some input into the choice of liquidator.

Yes, alternatives include company voluntary arrangements (CVAs), administration, or informal negotiations with creditors. A CVA allows the company to continue trading while paying off debts over time. Administration provides a moratorium from creditor action, giving time to restructure or sell the business.

Employees are automatically made redundant when a company enters liquidation, unless the liquidator retains them to help with the winding-up process. Employees may be able to claim certain arrears of wages, holiday pay, and redundancy pay from the National Insurance Fund, subject to statutory limits.

Directors are generally not personally liable for company debts, but liability can arise if they have given personal guarantees, or if they have acted wrongfully or fraudulently. Wrongful trading, for example, can lead to a court order requiring a director to contribute to the company's assets.

You will need to provide the company's books and records, including financial statements, bank statements, VAT returns, payroll records, and details of any assets and liabilities. The liquidator will also require a statement of affairs, which lists the company's assets and debts as at the liquidation date.