Where the core business is unprofitable, and there is no hope of a trading solution, liquidation is the likely result. There are three types of liquidation.
Creditors voluntary liquidation (when the company makes the decision)
The directors call meetings of the members and creditors of the company in order to appoint a liquidator. The role of the liquidator is to realise the assets of the company and to distribute them to the creditors in order of priority and return any surplus to the shareholders.
Compulsory liquidation (when the company is wound up by a creditor)
A creditor who is owed £750 or more can instigate this form of winding up. The creditor presents to the court a winding up petition against the company. Alternatively, the company, its directors and shareholders may also present a winding up petition.
Members voluntary liquidation (when the company can pay its debts in full – this only applies to a solvent company)
This process is normally instigated because of a need to restructure or cessation of trade.
Our experienced team of insolvency experts have successfully acted for liquidators or the directors of failed businesses. We can advise you on which option is best for you and guide you through the process. Directors should always take legal advice before closing the business to ensure that their own position is protected. We often wind up companies through the court at the directors’ request where funds are insufficient to wind up a company voluntarily. We offer a fixed price for this service with no hidden costs.
Where the business is solvent we can advise you on how the company can be wound up by its shareholders and how, after its debts are paid, the assets are distributed to its shareholders.
To find out more about our first class legal services call us on 0800 949 9123 or use the enquiry form.