Expert Company LiquidatorsServing Faversham Businesses

The cost of a creditors' voluntary liquidation typically depends on the complexity of the case, the number of creditors, and the value of company assets. Most licensed insolvency practitioners offer a fixed fee for straightforward liquidations, which covers statutory advertising, preparation of the statement of affairs, and the final meeting of creditors.

Your company must be insolvent, meaning it cannot pay its debts as they fall due, or its liabilities exceed its assets. The directors must pass a resolution that the company cannot continue trading, and at least 75 percent of shareholders must agree. A licensed insolvency practitioner must be appointed to act as the liquidator.

The initial appointment can happen within a few weeks of your first consultation, once all necessary paperwork is prepared and filed. The full liquidation process, including realising assets, agreeing creditor claims, and distributing funds, typically takes between six and twelve months, though complex cases may take longer.

You can continue trading until the formal resolution is passed and the liquidator is appointed, but you must not take on new credit that you cannot repay. Continuing to trade while insolvent without seeking professional advice could expose you to claims of wrongful trading, which may result in personal liability for company debts.

A company voluntary arrangement allows you to repay debts over an agreed period while continuing to trade. Administration provides a moratorium from creditor action while a restructuring is attempted. Informal arrangements with creditors, such as payment plans, may also be possible. A licensed practitioner can explain which option suits your specific circumstances.

In most cases, directors are not personally liable for company debts provided they have not acted wrongfully, fraudulently, or given personal guarantees. If you have given a personal guarantee for a business loan or overdraft, the creditor can pursue you for that specific debt after the liquidation has concluded.

All employees are automatically made redundant when the company enters liquidation. The liquidator will assist employees in claiming statutory redundancy pay, unpaid wages, holiday pay, and notice pay from the National Insurance Fund. Employees who have worked for the company for at least two years may be entitled to a statutory redundancy payment.

Yes, a creditors' voluntary liquidation does not require a court order. The directors can convene a board meeting to pass a resolution that the company is insolvent, followed by a shareholder meeting to approve the winding up. A licensed insolvency practitioner then calls a meeting of creditors to confirm the appointment.

You should have a current list of company assets and liabilities, details of any secured creditors, recent management accounts, a list of employees with their service dates, and information about any legal claims against the company. The liquidator will also need to understand why the company has become insolvent.

Directors have a statutory duty to cooperate fully with the liquidator, providing all company records, books, and accounts. Failure to cooperate can result in personal liability for debts, disqualification as a director for up to fifteen years, or criminal prosecution. The liquidator may also apply to court for an order compelling cooperation.