Professional Company LiquidatorsServing Clevedon

The cost of liquidation varies based on the complexity of the case, the number of creditors, and the value of assets. A licensed insolvency practitioner will provide a fixed fee quotation after an initial assessment. This fee is usually paid from the company's assets, but if there are insufficient assets, directors may need to fund the process personally.

Directors of a limited company that is insolvent can appoint a licensed insolvency practitioner to place the company into creditors' voluntary liquidation. Shareholders can also pass a resolution to wind up the company voluntarily, but the liquidator must be approved by creditors at a meeting. Eligibility depends on the company's financial position and the consent of the majority of creditors.

The timeline for a creditors' voluntary liquidation typically ranges from six to twelve months, depending on the complexity of the company's affairs. Simple cases with few assets and creditors may conclude faster, whilst cases with litigation or asset recovery can take longer. Your liquidator will provide a realistic estimate after the initial review.

Alternatives include a company voluntary arrangement (CVA), which allows the company to repay debts over time, or formal restructuring through administration. Sometimes, a simple strike-off is possible if the company has no significant debts. Each option has different implications for directors and creditors, so it is essential to seek professional advice to determine the most suitable route.

Directors must cooperate fully with the liquidator, providing all company records, financial information, and access to assets. They must not dispose of any company property without consent, and they must disclose any transactions that could be considered preferential or at an undervalue. Failure to comply can result in personal liability or disqualification.

Once a winding-up order is made or a creditors' voluntary liquidation is confirmed, the company must cease trading immediately. The liquidator takes control of the company's affairs, and any trading after this point is unlawful. However, the liquidator may continue trading for a short period to sell stock or complete contracts if it benefits creditors.

Employees are automatically made redundant when the company enters liquidation, unless the liquidator retains them temporarily to assist with asset realisation. Employees may be able to claim redundancy pay, unpaid wages, and holiday pay from the National Insurance Fund, which is a government scheme. The liquidator will provide the necessary forms and guidance.

Assets are distributed according to a strict legal hierarchy. Secured creditors with fixed charges are paid first, followed by preferential creditors such as employees' wages. Then, unsecured creditors receive a dividend if funds remain. Shareholders are paid last, and only if there is a surplus. The liquidator ensures that this process is fair and transparent.

Wrongful trading occurs when a director continues to trade whilst knowing that the company cannot avoid insolvency, and this action increases losses for creditors. If found guilty, a court can order the director to contribute personally to the company's assets. Directors may also be disqualified from acting as a director for up to 15 years. Seeking early advice helps mitigate these risks.

Yes, it is possible to liquidate an insolvent company with minimal assets, but you may need to fund the liquidator's fees personally. Some practitioners offer a reduced fee for 'assetless' cases, but they must still carry out statutory duties. Alternatively, a creditors' voluntary liquidation can be initiated with a declaration of solvency if the company can pay debts within 12 months.