Company Liquidation

Company Liquidation

Company Liquidation is the indication of end of particular firm or company. The hidden idea behind company closeout is to convert assets into cash. Most compulsory company closeouts are due to inability of a company to pay its debts or court has decided to shut down the company.

The actual liquidation includes closing the company and selling all of its assets.   What exactly happens in liquidation, company sell it’s all assets and pay the remaining liabilities. After that company is completely dissolved and removed from Companies house register.

You might be thinking that it sounds quite simple process, close company, sell its contents, get money, pay few bills and get back to home. But it is not as simple as that, depending on situation of company liquidation and other factors it can be short or long process.  

Liquidation Options

There are three possible options for a company to put into liquidation.

1.       Court enforces compulsory liquidation if the company owes money for admitted services.  Most probably secured or unsecured creditors carry out this sort of surplus.

2.       Voluntary company liquidation, in which company has almost come to the end of road because of insolvent trading.

3.       Voluntary liquidation by Shareholder s where company has funds to pay its creditors.

It may take short time if company or corporate is voluntarily selling assets as compare to bankruptcy.  Company liquidation can be avoided with alternatives that will help the company in debt like redesigning plan or other avenues. However, with the help of suitable debt solutions you can still stay in business.

The best option for company is to seek advice from professionals.  You cannot liquidate the company if you have creditors with debts outstanding.  On the other hand if your company has no debts left then simply fill up a form and submit in company’s house and remove company from register.