Require Immediate advice? 0800 063 9262
While liquidation and administration are both formal insolvency procedures, they are in fact very different processes which often seek to achieve very different outcomes.
In simple terms, liquidation is a terminal procedure which brings about the end of a company by selling – or liquidating – its assets before dissolving it entirely.
Administration on the other hand, is typically utilised when there is a chance of saving a business which is currently experiencing high levels of financial or operational distress. While administration can be used as a pre-cursor to liquidation, it is often used as a tool for the rescue and recovery of a distressed company.
Director Redundancy Entitlement – Did you know that as a limited company director, you may be entitled to claim redundancy if your company enters into an insolvent liquidation process? We can point you towards a fully regulated third party who can provide advice on your right to claim director redundancy if this is applicable to your situation. To understand if you are entitled, give a member of our team a call on 0800 063 9262, or email [email protected].
Liquidation Portal
For Company Directors
When a company becomes insolvent, its directors must take action to shield creditors from suffering any further losses. If the company's financial difficulties have taken it beyond the point of rescue, perhaps due falling sales, rising debts, and a challenging trading environment, liquidation may be the only possible route forward.
The liquidation of an insolvent company is achieved through a process known as a Creditors’ Voluntary Liquidation – or CVL.
As part of the liquidation process, a licensed insolvency practitioner is appointed who will identify the company’s assets before selling these for the benefit of any outstanding creditors. The company will then be brought to a close and its affairs wound down in an orderly manner. Any debts remaining at this point will be written off – unless the director previously provided a personal guarantee to secure the borrowing.
Take our 60 second test and find out
Where liquidation signals the ultimate end of a company, administration on the other hand is often focussed on saving the business by restructuring its operations and/or finances.
While insolvency is a huge warning sign that all is not well with a company, it does not necessarily mean that it is the end of the road for the business in question. If the company has a viable future, despite its current financial difficulties, administration can be used to effect a successful turnaround.
Once a company is placed into administration, the appointed administrator immediately assumes control of the company. A moratorium is also placed around the company which acts as a powerful ring-fence that halts any legal action being started or continued against the insolvent company.
This gives the administrator time and space to assess the company and devise a strategy to rescue the business should this be possible. This may involve a process of streamlining, such as closing down non-performing areas of the business to save money, or else by restructuring its debts to immediately free up cash flow.
There are times, however, when a company will enter into administration even though liquidation is inevitable. This may be done if being in administration can help to preserve the value of the company and its assets prior to them being liquidated. In this instance the company will exit administration and immediately enter into liquidation – typically through a CVL.
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
If your company is experiencing financial difficulties and you are unsure what your next step should be, you should make it a priority to seek the assistance of a licensed insolvency practitioner. At UK Liquidators we have over 70 fully licensed insolvency practitioners located across the length and breadth of the country, ready to provide you with the help and guidance that you need at this time.
We will take the time to understand your company and the problems it is currently facing. With this information we can advise you on your possible options - which could include liquidation or administration -and be with you every step of the way no matter what you decide. Call our expert advisers today to arrange a free no-obligation consultation with a licensed insolvency practitioner in your area.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
Looking for immediate support?
Complete the below to get in touch
