Liquidation Services

Liquidation usually occurs when a company becomes insolvent (unable to pay its debts as they fall due). Liquidation of a company is governed by the Companies Act 1993.

The process involves appointing a liquidator who will then take the appropriate steps to bring the business to an end.

Only a Licensed Insolvency Practitioners can be appointed as a liquidator. They are licensed by law to have the necessary qualifications, training and experience to act as a liquidator.

How does a company go into Liquidation?

There are a number of ways a company can go into liquidation. In most cases, where the company decides it cannot continue, the shareholders will appoint a liquidator by a special resolution. A special resolution usually requires 75% of all eligible shares voting for the resolution.

What does a Liquidator do?

Once a liquidator is appointed either by the shareholders or the court, the liquidator is obliged to:

• Consider calling a creditors meeting.
• Investigate the activities of the directors and affairs of the company
• Identify and take charge of the company’s assets
• Realise the assets of the company for the best value
• Distribute the assets according to the legislation
• Report any serious problems to the appropriate authority
• Report on progress to the creditors and shareholders

What is the 10 day rule?

If a creditor has petitioned the court to liquidate your company the shareholders have only ten working days after service to appoint their own liquidator and enter Voluntary Administration. After that time, the company must settle the debt with the creditor or face having a court appointed liquidator, usually one chosen by the creditor.

We recommend that if you get a notice petitioning to liquidate your company you contact us to discuss what can be done.