Company Liquidators in MarlboroughGuidance for Local Directors

The cost of a liquidation can vary depending on the complexity of your company's affairs, the number of creditors, and the work required to realise assets. A licensed insolvency practitioner will provide a fee quote based on your specific circumstances. It is important to obtain a clear breakdown of fees before you agree to proceed, ensuring there are no hidden costs.

Your company is legally insolvent if it cannot pay its debts as they fall due, its liabilities exceed its assets, or both. Indicators include statutory demands, winding-up petitions, or persistent creditor pressure. If you are unsure, a licensed professional can review your balance sheet and cash flow forecasts to confirm your position and advise on the appropriate course of action.

A Creditors' Voluntary Liquidation begins with a board meeting where directors resolve to wind up the company. A meeting of shareholders is then held to pass a special resolution. Following this, a meeting of creditors is convened to confirm the appointment of a liquidator. The liquidator then takes control of the company's affairs, realises assets, and distributes funds to creditors in the statutory order.

A compulsory liquidation is initiated by a creditor or director presenting a winding-up petition to the court. The court will set a hearing date, which is typically several weeks after the petition is presented. If the order is granted, the Official Receiver becomes the liquidator initially. The entire process can take many months to conclude, depending on the complexity of the case.

Once a company enters liquidation, the directors' powers cease, and the appointed liquidator takes control. The company cannot continue normal trading activities. However, the liquidator may continue trading for a short period if it is necessary to achieve a better outcome for creditors, such as completing existing orders or selling the business as a going concern.

Depending on your circumstances, alternatives may include a Company Voluntary Arrangement to repay debts over time, administration to rescue the business, or an informal arrangement with creditors. If the company is viable but facing cash flow issues, a restructuring plan might be appropriate. A licensed professional can assess your situation and recommend the most suitable solution.

Once a liquidator is appointed, they take control of all company assets. This includes property, equipment, stock, and intellectual property. The liquidator will secure these assets, arrange for their valuation, and then sell them to generate funds for distribution to creditors. The proceeds are paid out in a strict statutory order, with secured creditors and preferential creditors taking priority.

Generally, directors are not personally liable for company debts if they have acted properly and within the law. However, personal liability can arise if you have given a personal guarantee, traded wrongfully, or acted fraudulently. A licensed insolvency practitioner can advise you on the potential risks and help you understand your exposure before you commit to a liquidation.

A licensed insolvency practitioner acts as a professional advisor and officeholder. They are responsible for managing the liquidation process, which includes investigating the company's affairs, realising assets, agreeing claims from creditors, and distributing any available funds. They also have a statutory duty to report on the conduct of directors and to ensure that the process is carried out in accordance with insolvency law.

A Members' Voluntary Liquidation is used for a solvent company. Once the declaration of solvency is sworn and the shareholders pass the resolution, the liquidator is appointed. The process typically takes between six and twelve months to complete, depending on the time needed to collect assets, settle liabilities, and distribute the remaining funds to shareholders.