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0 Company liquidation might sound serious, and it often is, but it doesn’t have to be confusing. For some businesses, it is simply the most practical way to close down when things are not working anymore. If you are hearing the phrase ‘company liquidation’ for the first time and are wondering what it means, read on to find out more.
Understanding liquidation
Liquidation is the process of closing a company and using any remaining assets to pay off debts. Once this has been done, the company is removed from the register and no longer exists. It is a legal process handled by a licensed insolvency practitioner and follows a clear set of rules to make sure everything is fair and final.
Different routes to closure
There are two main types of liquidation. One is voluntary, whereby the directors decide to close the business because it can’t keep up with what it owes, and the other is compulsory, whereby a creditor applies to the court to shut the company down. Both lead to the same result, but they begin in different ways.
What this means for directors
If it is a voluntary liquidation, the directors stay involved at the beginning and work with the liquidator to gather records and make sure everything is handed over properly. As long as the business has been run with care, this stage is usually smooth.
Getting the right support
Are you in this position and looking for a London law firm? If so, speak to one that understands insolvency law. A trusted London law firm can explain the steps to take, help you stay protected, and make the experience less daunting from start to finish.
Closing a chapter
It can feel like a lot to take in, but liquidation is sometimes the most responsible choice. Done properly, it can be a clean break that allows you to move forward with clarity. It might even be the thing that means you can move forward; if this is the case, it is certainly worth considering
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