What is Liquidation or Winding Up of a Company?
Liquidation is the process used to wind up a company and bring it’s life to an end. Company property is realised, creditors paid out in a fixed order of priority and any surplus is distributed among the shareholders according to the constitution of the company or the Companies Act 1993. When these steps have been carried out the company is removed from the register.
Types of Liquidation
There are two types of liquidation.
– Insolvent Liquidation
– Solvent Liquidation
In some circumstances, for example, shareholder disputes where assets may be at risk, the Court may appoint an interim Liquidator who is tasked with protecting the assets and reporting back to the High Court with their recommendations. At Principle Insolvency, we know that dealing with these issues can be difficult and stressful. Our experience in this area enables us to intervene in the most efficient and effective manner to maximise value for all stakeholders.
Liquidation to Wind Up a Company
The liquidation of a company can occur via several paths however most commonly it occurs when the company decides it can no longer continue to trade as it is insolvent and the shareholders will appoint a liquidator. Another common method of liquidation is via the High Court where a creditor of the company petitions to liquidate the company by issuing a statutory demand. If this statutory demand goes unremedied, then that creditor can apply to the High Court to put the company into liquidation. In some instances, the board of a company is able to voluntarily appoint a liquidator to the company. However, this is only possible if the constitution of the company specifically allows for it. If you are a shareholder of a company that needs to discuss insolvency options, or a creditor who has issued a statutory demand against a company or who is looking to enforce a debt, please contact us to discuss the options available to you.
Note: From 1 September 2020, all insolvency appointments including liquidations must be undertaken by a Licensed Insolvency Practitioner. You can confirm our licensing by clicking here to view the Insolvency Practitioners Register.