Expert Company LiquidatorsServing Shaftesbury Businesses

A company liquidator is a licensed insolvency practitioner who takes control of a company that is being wound up. They sell the company's assets, investigate the directors' conduct, agree claims from creditors, and distribute any available funds according to the legal priority order. They also ensure that the company is formally dissolved at the end of the process.

The cost of a creditors' voluntary liquidation (CVL) typically ranges from £4,000 to £8,000 plus VAT, but this can vary depending on the complexity of the company's affairs. The liquidator's fee is usually paid from the company's assets, not from the directors' personal funds. However, if there are no assets, creditors may fund the process or the directors may need to contribute.

To enter a creditors' voluntary liquidation, the company must be insolvent, meaning it cannot pay its debts as they fall due. The directors must pass a resolution to wind up the company, and the shareholders must approve it. You must also be able to provide a statement of affairs, listing all assets and liabilities. A licensed insolvency practitioner will assess your situation to confirm eligibility.

The initial creditors' meeting is usually held within a few weeks of the resolution to liquidate. The liquidation itself can take anywhere from six months to two years or more, depending on the complexity of the company's affairs, the ease of selling assets, and whether any investigations are needed. Simple cases with few assets can be concluded more quickly.

A creditors' voluntary liquidation (CVL) is initiated by the directors and shareholders of the company. A compulsory liquidation is ordered by a court, usually after a creditor petitions for a winding-up order. In a CVL, the directors choose the liquidator, whereas in a compulsory liquidation, the official receiver or a court-appointed insolvency practitioner takes control.

No, once a liquidator is appointed, the directors' powers cease, and the liquidator takes control of the company's affairs. The company must stop trading immediately, except for the purpose of a beneficial realisation of assets. The liquidator may continue to sell stock or complete contracts if it benefits the creditors, but the directors cannot make any new trading decisions.

Employees are automatically made redundant when a company goes into liquidation. The liquidator will dismiss all staff, and they may be able to claim redundancy pay, notice pay, and unpaid wages from the National Insurance Fund. The liquidator will provide employees with the necessary forms (RP1, RP2, and RP3) to make these claims, and will also assist with any queries.

Yes, there are several alternatives to liquidation, including a company voluntary arrangement (CVA), administration, or an informal agreement with creditors. A CVA allows the company to continue trading while paying off debts over a period of time. Administration provides a moratorium from creditors while a restructuring is attempted. A licensed insolvency practitioner can advise on which option is most suitable for your circumstances.

If you have given a personal guarantee for a company debt, the lender could pursue you personally, which might put your home at risk if you cannot repay. Also, if you have taken a director's loan from the company, the liquidator can demand repayment. However, liquidation itself does not automatically affect your personal assets, but you should seek legal advice if you are concerned about personal guarantees.

You should choose a licensed insolvency practitioner who is authorised by a recognised professional body, such as the Insolvency Practitioners Association or the ICAEW. Look for someone with experience in your industry, transparent fees, and a clear communication style. You can speak with a specialist listed on AccountingFirms to ensure you get the right advice for your situation.