Liquidating the company

Step 6 | Creditors hold a meeting to confirm the company liquidator.Step 7 | The administration of the liquidation starts.

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Liquidation is a process where the assets of a company that cannot pay its debts, are distributed by a liquidator or the Official Assignee.

A company is placed into liquidation when it is unable to pay its debts. A liquidator is appointed to investigate the company’s financial affairs, establish the reason why the company failed, investigate possible offences, and identify and sell any assets to help repay creditors.

Officers of the company must assist the liquidator by providing information and answering questions.

Accountants and solicitors can help provide information about options for insolvent companies.

All liquidations will vary as they are dependent on a number of things.

For example, the company’s financial affairs, the reasons why the company failed, possible offences, the amount or value of the company assets and more.

Step one | The company is unable to repay its debt to its creditors Step two | The decision is made by either the company itself or its creditors that it is going to be placed into liquidation.

This can be done by one of the following: Step 3 | A liquidator is nominated and appointed Step 4 | The appointed liquidator notifies the Companies Office Step 5 | The liquidation is advertised to the public on the Insolvency and Trustee Service website here.

"A man in the pub said I cannot be a director of any other company if I liquidate my company. As a result of this rubbish, many struggling directors worry about liquidating their company as they think it might seriously affect them personally. Listening to bar room experts, inexperienced accountants or lawyers or marketing people can stop decisions being made, this failure to make a decision is really what could land you in trouble. Having a limited liability company means that the directors have little risk (or limited liability) if the company fails, as long as they have But, and it is a big but, if you fail to act in time, fail to act reasonably, fail to keep books and records, continue taking credit KNOWING that the company cannot possibly repay it, then you ARE at risk of personal financial loss or worse.

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