Articles

Being the director of a company which is entering liquidation is an undoubtedly stressful time for anyone. It is likely you have never been in this position before and you are unsure about what to expect.

It is unavoidable that company liquidation does come with a cost attached. As part of the liquidation procedure, a company’s assets will be sold, or ‘liquidated’, by the appointed insolvency practitioner in order to raise as much money as possible with which to settle the business’s liabilities.

In an administration the director can make a claim for redundancy so long as they are made redundant as part of the process. The company can then be sold after the administrator has made the director redundant. Let’s look at the process more closely.

A solvent company will have more assets than liabilities and will be able to keep up with its outgoings such as bills, wages, and debt repayments, as and when they fall due.

There are several ways to close down a limited company, the best one for your business depends on its financial situation and what you want to achieve as part of the closure.

Once a company gets to the stage where it is struggling to keep up with its liabilities as and when they fall due, options need to be considered to protect the business and its creditors from incurring further losses.