I’m considering liquidating my company as it appears to be failing and I don’t think it can recover. If I did this, would I need to pay an insolvency practitioner? Can I liquidate my company with no money?.” In this article, we look at how to liquidate a company with no money and whether this is possible.
Any business can conduct a partial liquidation (selling some of the company assets to repay debts with the goal of continuing the business). However, theis should not be undertaken when a business is insolvent and cannot pay its debts. Immediate advice should be sought from an insolvency practitioner.
The two main formal liquidation procedures for an insolvent company are creditors’ voluntary liquidation and compulsory liquidation. The role of liquidator can only be carried out by a licensed insolvency practitioner.
Whilst you could wait for creditors to force your company into compulsory liquidation through the courts, most directors prefer to opt for a creditors voluntary liquidation as at least they have some degree of control over the timing and the process .
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How much does it cost to liquidate a cost?
Liquidation fees can range from £4,000 to £8,000 or more depending on the complexity of the case. However, if you cannot afford these fees and don’t have access to a line of credit that could cover the cost, there are some options available. Contact us if you’d like a quote to process a Creditors Voluntary Liquidation to close down your company.
Take care when receiving advice to make sure the person giving it is a qualified insolvency practitioner, and not a broker or middleman trying to charge you unnecessary fees upfront.
The liquidation process
If you want to close your company with no assets to sell, you could consider the strike-off procedure which takes 3-6 months on average. There are strict rules which must be followed including notifying creditors who can object resulting in the procedure being suspended. Do not attempt strike-off if your company has a bounce back loan.
Once you are aware that the company is insolvent, it is crucial to be cautious of your future actions and seek proper advice. If you sell assets at a price much lower than market value, you could be charged with miseasfance. Furthermore, avoid trading or incurring further credit whilst the company is insolvent or you may be found guilty of wrongful trading and this might lead to disqualification and even personal liability for some of the company’s debts. It’s always advisable to seek professional advice if you’re business is in financial distress.
If the business is struggling and can’t pay its debts, then you may need to consider a formal insolvency liquidation procedure, which will need to be handled by an insolvency practitioner.
Ultimately, if you are struggling to afford the fees associated with an official insolvency liquidation, then it is best to contact an approved IP and explain your financial situation. It is possible they could provide assistance or advice on where to find a more affordable solution.
Creditors Voluntary Liquidation
You may want to consider a Creditors Voluntary Liquidation (CVL) as it is the most cost-effective option, and Company Doctor can help you with this. Just call us for a quote. We will help you to complete all the paperwork and legal formalities on your behalf and arrange for your company to be formally closed with Companies House.
It is important to remember that, if your company is insolvent, then it should be liquidated, even if you cannot afford to do so professionally. Failure to do so can result in serious legal consequences. If you require assistance and cannot afford to pay the fees associated with an IP, then please contact us at Company Doctor to discuss your options. We may be able to provide some guidance or assistance on where to find a more affordable solution
If you’re worried about how much it’ll cost to dissolve your company, please give us a call at 0800 169 1536 or send us an email on helpline@companydoctor.co.uk. We want to help work out the best solution for your business insolvency issue in the most efficient way possible.
