
ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More

ACCOTAX - Accountants & Tax Consultants
Welcome to ACCOTAX, a firm of Chartered Accountants in London. The firm was established in 2009 and has helped thousands of businesses and individuals...See More
Frequently asked questions
What is the role of a company liquidator in the UK?
A company liquidator is a licensed insolvency practitioner appointed to manage the winding-up of a company. Their role includes taking control of the company's assets, realising their value, distributing funds to creditors in the statutory order, investigating the company's affairs, and reporting to creditors and the Insolvency Service. They also ensure compliance with the Insolvency Act 1986 and related legislation.
When is a company required to enter liquidation?
A company typically enters liquidation when it is insolvent, meaning it cannot pay its debts as they fall due, or its liabilities exceed its assets. Liquidation can be voluntary (initiated by directors or shareholders) or compulsory (ordered by a court, usually following a creditor's petition). It is also used for solvent companies via Members Voluntary Liquidation for restructuring or closure.
What is the difference between CVL and Compulsory Liquidation?
Creditors Voluntary Liquidation (CVL) is initiated by the directors and shareholders when the company is insolvent, and a liquidator is appointed by the shareholders and creditors. Compulsory Liquidation is a court-ordered process, usually started by a creditor who petitions the court for a winding-up order. CVL offers more control and is generally less costly and quicker than compulsory liquidation.
Can a director be held personally liable for company debts after liquidation?
Directors are generally not personally liable for company debts if they have acted within the law. However, liability can arise for wrongful trading, fraudulent trading, or if they have given personal guarantees. A liquidator may also pursue directors for misfeasance if they have misused company assets. Seeking professional advice early can help mitigate these risks.
How long does the liquidation process take in the UK?
The duration varies depending on the complexity of the company's affairs. A Creditors Voluntary Liquidation can often be completed within 6 to 12 months, but cases with complex asset realisations, legal disputes, or investigations may take longer. Compulsory liquidation can take a similar time, but court proceedings may add delays. A liquidator will provide a timeline after an initial review.
What happens to employees when a company goes into liquidation?
Employees are automatically dismissed when a company enters compulsory liquidation, but in a CVL, they may be retained for a short period to assist the liquidator. Employees are entitled to claim for unpaid wages, holiday pay, and redundancy from the National Insurance Fund (via the Insolvency Service). The liquidator provides them with the necessary forms and guidance.
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