A Voluntary Liquidation Writes-off Debts

What is liquidation?

Liquidation is the process of winding up your company’s affairs when it has either reached the end of its useful life, cannot pay its debts when they are due, or its assets are less than its liabilities.

What are the benefits of voluntary liquidation?

The benefits can vary depending on your company and your reasons for going into voluntary liquidation but you can expect the following:

  • Creditors claims die with the company (unless you have given a PG)
  • Stop pressure from creditors
  • Ability to have a fresh start, whether that be in business again or not
  • No personal liability unless you have given a PG or done something fundamentally wrong

Do you deal with the liquidation of my company?

Yes we do, in fact liquidations and other types of insolvency are all we do. Our insolvency practitioners (IP’s) specialise in dealing with the liquidation of companies in a fast, confidential and considerate manner. We know placing your company into liquidation is a tough and difficult decision and you want help from someone who understands this. We genuinely understand the difficult decisions you face every day as a business owner (because our IP’s run and own businesses too) and because of that we are perfectly placed to help you liquidate your company.

Are there any alternatives to liquidation?

Yes there are. You may not need to liquidate your company, the problem may be resolved by buying you some time or raising some finance, but if you do need something like a liquidation, then maybe an administration, a Creditors Voluntary Liquidation or a prepack administration is the best solution. When you call, we will be able to help you determine the best course of action.

What does a liquidation cost?

The cost of liquidations can vary dramatically depending on the size, complexity and type of liquidation, e.g. a court based liquidation could cost £3,000 or more, a solvent liquidation may be as little as £2,000, but an insolvent liquidation starts at £2,995 (subject to circumstances). Call us to discuss your requirements and see if a liquidation is appropriate.  If it is we can then provide you with a quote.

What are the consequences for me of a liquidation?

Covering all possible consequences here is not possible, but being a director of a company that has gone into liquidation does not mean that you are automatically barred from being a director of another company, in fact the only times you cannot be a director are when you are bankrupt or have been disqualified.

Being connected with a company going into liquidation does not currently affect your personal credit rating.  You will have to settle any personal guarantees you have given.

You will also be subject to a return to the Insolvency Service regarding your conduct as a director.  This investigation happens in all liquidations, so do not worry that the voluntary liquidation process is any harder than any other option.

How do I enter a Voluntary Liquidation

Directors or shareholders start the process, but it is shareholders who ultimately decide whether to go into liquidation.  We will talk to you about this in detail if liquidation is the best solution for your circumstances.

A Lucas Johnson insolvency practitioner will go through all relevant options with you including a CVA or prepack administration. When you understand all options and have selected which way you want to progress, our insolvency practitioners will explain the next steps depending on your business structure. Call us today and we can run through everything with you.

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