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Appointing a liquidator for your company

Company Liquidators

Company liquidation is the process of closing your company and liquidating all of its assets in order to repay creditors. There are several ways to liquidate a company, all of which involve its closure and the sale of its assets:

In this guide, we’ll explain the role liquidators play in each step of the compulsory or voluntary liquidation process.


Company liquidators in compulsory liquidation

If your company ignores a statutory payment demand from one of its creditors for a legitimate debt, it faces the possibility of being served a winding up petition. This is a legal petition to the High Court to initiate the compulsory liquidation process.

If the petition is successful, your company’s creditor will be issued with a winding up order. A hearing will be held and, if successful, a liquidator will be appointed by the creditor to facilitate the sale of your company’s assets.

In compulsory liquidation, your company will be liquidated by external company liquidators hired by the creditor. Not only will you have little involvement in the process; you could face charges of wrongful or fraudulent trading.

Because of this, it’s important to respond to the receipt of a winding up petition properly, even if you plan to liquidate your company. We can help you make the right decisions if your company is insolvent and about to be liquidated.


Company liquidators in a creditors’ voluntary liquidation

A creditors’ voluntary liquidation (CVL) is an alternatively form of liquidation. While a winding up order results in the compulsory liquidation of your company, a CVL will result in the voluntary liquidation of your company’s assets to pay its creditors.

In order to propose a CVL, you will need to contact an insolvency practitioner. They will propose the CVL to your company’s creditors and, in the event that the proposal is accepted, act as company liquidators during the sale of your company’s assets.

In certain cases, your company’s creditors may wish to appoint their own liquidator in order to realise your company’s assets. This is particularly common with lenders such as banks and corporate finance providers, who will use their own liquidators.

In this situation, your insolvency practitioner will be able to provide advice and an effective solution for your company. This makes it especially important to seek out expert advice in the event that your company is under pressure from its creditors.


Company liquidators in a members’ voluntary liquidation

A CVL isn’t the only form of voluntary liquidation. As part of a members’ voluntary liquidation (MVL), the shareholders in your company voluntarily decide to liquidate its assets in order to extract the company’s value in cash.

The MVL process often allows your company’s shareholders to minimise their tax obligations by withdrawing the company’s value in the form of a lump sum subject to capital gains taxes instead of income taxes.

In order to initiate an MVL, you will need to speak to an insolvency practitioner and appoint a liquidator for your company. They will need to ensure your company has sufficient funds to repay its creditors before proceeding with the liquidation.

We can offer assistance if you’re interested in appointing a liquidator. Our experts have worked on hundreds of company liquidation cases throughout the UK for a wide range of companies.


Is company liquidation your only option?

A wide range of alternative solutions are available for companies that are insolvent but still commercially viable.

These include company voluntary arrangements (CVAs), which let your company organise an arrangement to repay its creditors over time, and entering pre-pack administration to sell your company’s assets and form a new corporate entity.

Other options include administration with the goal of paying creditors and turning around your company, emergency financing loans or equity investments and asset refinancing solutions.


Get expert advice from experienced company liquidators

We’ve provided help, advice and assistance to hundreds of UK businesses during the liquidation process. We’ve also helped companies avoid liquidation through options such as pre-pack administration, CVAs and emergency financing.

If you have questions about the liquidation process or want to learn what’s best for your company, we’re here to help. Contact us now for expert advice and actionable help from qualified, experienced liquidators and insolvency practitioners.

Appointing a Liquidator

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