Liquidating a company
One example of a creditor could be tax arrears with HMRC for VAT or PAYE, so this need to be considered before going into liquidation.
Compulsory liquidations are usually initiated by a creditor that is looking to force a company into closure via a court order application.
The conduct of the directors is reported back to the Secretary of State at the end of the liquidation proceedings and failure to cooperate with the Official Receiver can have serious repercussions.
If you cannot pay the creditor and do not act immediately the situation can escalate quickly.
If the limited company has liabilities that it cannot afford to pay and you would like to move on without the stress of the company’s debts hanging over your head, this type of business liquidation may be an appropriate option.
Directors may see voluntary liquidation as a welcome and safe exit from a stressful situation; whilst addressing all of the creditors, appropriately.These professionals have the responsibility to act as an impartial, third-party to oversee the process from beginning to end, after their appointment.The role of a liquidator encompasses various responsibilities which include, but are not limited to: The most important thing for directors to realise when liquidating a company is that their responsibilities undergo a marked shift if the company becomes insolvent.This insolvency procedure is usually handled by the Official Receiver, or an appointed Insolvency Practitioner.Therefore, this is not a voluntary process for directors.