In most situations it actually the preferred solution to Insolvency by the powers that be.

How can Company Liquidation be that?

Let’s look at it from a creditors viewpoint. Ok so you owe them some money. If you carry on trading (and this is particularly true with Revenues & Customs) the chances are you need to more credit in order to satisfy the orders you will be getting. This is particularly true with VAT where every trade you do will incur further VAT debt – and you haven’t been able to satisfy your historic VAT debt yet!

In fact if you don’t Liquidate you really are just getting further and further into the mire.

Company Liquidation really is the lesser of two evils. You can either draw a line under the debt problem or can continue with things and the debt problem gets worse and worse.

When you don’t need Liquidators.

However, there are times when Voluntary Liquidation isn’t the only answer to a debt problem. For many businesses with low level of debts (less than £10,000) then they have options such as Dissolution, which don’t require Liquidators to be involved.

The caveat on this is that there are situations when Dissolution is not the appropriate course of action, and so we would advise you speak to a professional whatever you decide.

If you owe more than £10,000 and you really need to talking to a company of Liquidators, and they can guide you through the best way forward.

In the UK you can’t just Liquidate a company without Liquidators being appointed. When you think about it this makes sense, otherwise Directors who had broken the law could get away with murder!

If in doubt speak to a professional about your proposed company Liquidation, it will make life a lot easier in the long run.

Before the pre administration is started, you don’t need to consult your creditors. This is a major advantage to the company as creditors cannot block the move like they can do if you choose a company voluntary arrangement. Although the creditors cannot do anything, it does not mean that the company can do anything without the creditors’ consent. Companies need to keep the detailed records of the entire proceedings as they may need to give an explanation on why they opted for a pre-pack administration package.

Before the business is actually placed into administration, it is important to decide upon the exact details of the sale. Once all the required paper work is done, the administrators can carry out the sale of the business. As this process can be especially sensitive, it can potentially affect many other parties. This is why everything has to be well documented and transparent. If you fail to do this, it can lead to negative repercussions further down the line.

If you think pre pack administration is the best course of action for your company, you should get in touch with a company that specialises in the pre pack administration. Thus, the process of pre pack administration can be simplified greatly.

The business liquidation process

Liquidating a business is a sensitive process which requires careful consideration and adequate time. The first step in this process is to consult professional liquidators and a lawyer as they will help with the process. Company owners who are liquidating their business on account of debts may also have to contact their creditors. However, it is best to have a thorough business liquidation plan before approaching your creditor. This increases the chances of them supporting the plan.

Maintain an asset record

Once the business liquidation plan has been decided and agreed upon by creditors, company owners have to make a list of their assets that will be sold. It is important that all these assets are described in detail and have serial numbers attached. Ensuring your assets are in good condition is important if you want a good deal from the business liquidation process.

There are different ways to sell off a company’s assets. These include public auctions, sealed bidding, online sales and going-out-of business. When the assets have been sold, companies can pay off their creditors. If there is any money left over, it is split amongst the company’s owners.

Shutting down a business is certainly not an easy task and requires immaculate planning to avoid any additional problems. A well-thought-out plan will help in improving your chances of success. Following are some of the important points that need to be taken into consideration when terminating your business.

Consult your lawyer or liquidation consultant

Legal aid is essential when dissolving your company. He/she will advice you about the steps to be implemented when liquidating your business. Similarly, you should also seek the help of an expert liquidation consultant. A skilled liquidator will guide you along each and every step and help you in order to achieve the desired results.

Inspect your Assets

The liquidator will examine your assets in detail and estimate the value it is likely fetch after an auction or sale. Various factors such as the quality of the assets and age will be considered when evaluating your assets.

Choose a ‘Sale’ for your Merchandise

You can sell your items either online or via an auction. However, this task should be left to the liquidator. The liquidator will select an appropriate day and place for selling off the assets.

The above mentioned points form an important part of the business liquidation process.

How is company liquidation decided?

Company liquidation can be voluntary or compulsory. Compulsory liquidation is a decision to liquidate and close down a business which is taken by law. On the other hand, voluntary liquidation is decided by the management of the company if they agree that there are inadequate funds for daily transactions. Thus, company liquidation is decided upon depending on the situation and finances of the company.

How can company liquidation benefit businesses?

Through company liquidation, businesses can gain cash in an upfront method. This is because liquidators sell additional inventory and stock. The money obtained from here can then be used for better purposes. For instance, companies can use this money to buy fixed assets or fast selling stocks that can increase finances. The cash can also be used to pay off debts and employees.

With the benefits that company liquidation offers, there is little doubt that it is one of the best measures when closing down a company. However, it is important to get professional liquidators to handle the entire process if you want the best outcome from this procedure.

• Voluntary business liquidation
• Compulsory business liquidation

Here is some information about voluntary liquidation:

Voluntary liquidation is a form of liquidation which is initiated by the directors and shareholders of a company. This step is taken when they think that their company is not profitable and sustainable. If the company has enough assets to pay off its debts to the creditors then it is known as Members voluntary liquidation. On the other hand, when the company’s assets are not enough to pay off debts then it is known as Insolvent voluntary liquidation.

In the case of insolvent liquidation, the directors have to meet a licensed insolvency practitioner, who is also known as a professional liquidator. This liquidator helps in arranging meetings with creditors and shareholders. This will help the company to choose an alternative way to pay off creditors.

The professional will also deal with all the legal formalities which are involved in business liquidation.

The need for company liquidation

During these times, opting for company liquidation is the best idea. With company liquidation, company owners can close down their business in an easy way. This process can be beneficial as it provides company owners with finances to pay off any outstanding debts. However, to ensure company liquidation is carried out properly, it is important to appoint professional liquidators to oversee the entire process. This can offer many advantages to the company and its owners.

One of the main reasons to hire liquidators is that excess inventory will be translated to immediate cash. Also, with professional liquidators, you don’t have to worry about excess inventory adversely affecting regular distribution channels.

In addition to all this, you can be sure of getting the right value from your inventory when experienced liquidators are taking care of the process. All these reasons make hiring liquidators the best way to close down an unsuccessful business.

Compulsory liquidation

This type of liquidation is ordered by a court and goes into action when a company fails to pay its debts. The court appoints an officer who will handle the case and ensure that procedure is completed appropriately. As soon as the assets are sold, the money is distributed amongst the debtors.

Voluntary liquidation

Unlike compulsory liquidation, voluntary liquidation takes place when the business owners or shareholders decide to sell their assets and repay debts. Other than this, there are many other reasons which can lead to voluntary liquidation. In some cases, when all the debtors are paid, the remaining money is distributed amongst the shareholders.
If you are planning to undergo business liquidation then you can opt for liquidators who will help you to sell your assets at reasonable rates, in addition helping you to pay off your debtors.

So, if you are facing financial difficulties, it is recommended to settle your debts through voluntary liquidation before the court orders compulsory liquidation.

How does voluntary liquidation work?

Voluntary liquidation involves the creditors of a company agreeing to liquidate the company and its assets. The money obtained from this process is distributed between them or used in other ways. Creditors usually go about this process by first appointing an insolvency practitioner who ensures the company’s assets are valued at the right prices and are then bought by the highest bidder.

Start a brand new business

Sometimes, existing directors from the company can bid for certain assets that can be reused. This allows the directors to set up a new company and start trading afresh without being burdened by debts from the old company. This is one of the best features of voluntary liquidation and it can work extremely well for some companies.

When opting for voluntary liquidation, or any other type of liquidation for that matter, it is essential that companies choose reliable liquidators from professional companies.