How Does the Liquidation Process Work?

When it comes to progressing with your company liquidation process, it is useful to have a clear summary on how the process is expected to work, in order for you to monitor where you’re at in the liquidation process and what is coming next. A good Insolvency Practitioner will of course keep you informed about each stage of the liquidation process in detail, but for now we’ll lay out the key stages involved so you can get a helpful overview.

Once you’ve looked over this page – and any others related to liquidation if you want to read in more detail – you can get in touch with us to discuss your company liquidation needs. We’ll be able to offer a free consultation to discuss your current financial needs and how the company liquidation process could work for you. Our team is available by phone or email, with details available on our Contact page.

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3 Key Questions on Liquidation Process

How Do the Directors start the liquidation process?

Firstly, once the directors of a business realise that their business is insolvent, they should contact an Insolvency Practitioner and appoint them as the liquidator. Once appointed as the liquidator, they will begin to try and understand the business, to ensure that a CVL is the most appropriate course of action. If the directors of the business are intent on closing the company, then a liquidation process will be the solution.
 

How does the creditors’ meeting work?

If the business cannot continue trading, and it is deemed that a Creditors’ Voluntary Liquidation is the most appropriate course for the business, approximately one month after the company ceases to trade a creditors’ meeting must be held. At this meeting, the Insolvency Practitioner’s appointment will be confirmed, however on rare occasions whereby a creditor such as the bank is a major creditor, they can formally insist that the liquidator is selected from their own panel, rather than those appointed by the directors.

In our experience, at the creditors’ meeting, there are very few (if any) creditors usually present, it is merely done as a formal procedure required by the company liquidation process. If you have been invited to attend a creditors’ meeting as a debtor we’d recommend attending, as this is when a statement of affairs is presented, which is prepared by the Insolvency Practitioner and details the current financial position of the company and informs all creditors about the liquidation process.
 

What happens after the liquidation?

Once the company has been liquidated it will no longer exist, therefore cease to trade. The liquidator must also investigate each of the directors to ensure that any actions during the time the business was insolvent still met their fiduciary duties. If they were found to be trading insolvent, the directors can be found guilty of wrongful trading and become personally liable for some (or all) of the company’s debts.

Furthermore, they could also be banned from acting as a director of a company for up to 15 years.It’s important to remember that liquidation isn’t always the only option, and it’s always essential to seek professional advice to explore other options that may be available to you. So, to speak to our expert team about your liquidation options and any other possible financial solutions available to you, get in touch today.

How we’ve helped others through
rescuing their business

At the Insolvency Experts our sole aim is to rescue, recover and renew businesses that are in difficulty. We are specialists in corporate turnaround and help business overcome cash flow difficulties and other financial problems. Our experts:

  • Help you to take the appropriate steps to meet any impending deadlines
  • Have a long track record in helping companies in similar positions
  • Can help you take the best course of action, often using your assets to help you avoid additional cost

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We helped a struggling Birmingham restaurant from going into administation:

  • Turnover £890K
  • Total Creditors £94K
  • Assets £340K
  • HMRC Overdue £20K
  • Profit Now +£15K

We helped a marketing agency from going into administation:

  • Turnover £700K
  • Total Creditors £120K
  • Assets £20K
  • HMRC Overdue £30K
  • Profit Now +£80K

Creditors’ Guide To Fees

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Why Choose Us?

We understand you have already made every effort to avoid insolvency and day to day life is stressful at the moment. We can start immediately and quickly work with you through the process.

We see many examples of great businesses that have fallen on hard times or suffered through no fault of their own.

We understand that the company directors and shareholders have already tried valiantly to carry on trading, but circumstances dictate that this is no longer possible.

  • We Remove Stress
  • We Act Quickly
  • We Are Cost Effective
  • We Are Formally Accredited
  • We Are CVL Experts
  • We Act Confidentially

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