Liquidations

Wayne Deuchrass, Gus Jenkins, Keith Harris, Iain Nellies - Directors and Principals

Liquidation is a process used to bring a company’s life to an end. The company property is realised, the creditors paid out in a fixed order of priority and the surplus, if any, is distributed among the shareholders according to the constitution of the company or according to the Companies Act 1993. When these steps have been carried out the company is removed from the Companies Register.

There are two types of liquidation.

• Solvent Liquidation (when there is sufficient money to pay everyone and there is a surplus back to the shareholders)
• Insolvent Liquidation (when there is insufficient money to pay everyone)

This section deals with insolvent liquidations.

Voluntary Liquidation

The directors and shareholders identify that the company is insolvent and the shareholders agree to appoint a liquidator by way of a special resolution. The liquidator takes custody and control of the company assets, records and works with the directors and shareholders to bring the company’s affairs to an orderly close. If a company is insolvent then the sooner that this position is identified and the company is put into liquidation then there is likely to be a better outcome achieved for all of the creditors.

We are more than happy to talk to you and help you determine if your company is solvent or not and discuss options.

Court Appointed Liquidator

This follows a successful application by a creditor to the Court to appoint a liquidator and usually follows the service of a statutory demand on the company which was not satisfied. If an application to liquidate has been served on your company the shareholders have only 10 working days in which they can pass a special resolution to appoint a liquidator otherwise the application must be dealt with by the Court.

Although Court appointed and shareholder appointed liquidators work to the same rules, you will find that if you appoint IML then you will be dealing with experienced liquidators who will develop practical and pragmatic result to achieve a legal and equitable outcome for all parties involved in the liquidation.

Examples of insolvent Liquidations we have carried out.

Trades – mechanical, plumbing, joinery etc.
Services – hairdressing, IT, consultancy etc
Boutique Brewery
Transport Company
Hire Business
Property developers

This section deals with solvent liquidations.

Why Liquidate a Solvent Company?

The liquidation of a solvent company occurs for a number of reasons including:

• Tax free distribution of capital gains.
• Company restructuring.
• Company has ceased trading and is no longer required.
• Legally brings a company life to an end – being struck off the company register does not.
• Peace of mind. No acrimonious 3rd party can then have the company reinstated.

Again if you wish to look at liquidating your solvent company we are happy to discuss this option.

Examples of Solvent Liquidations we have carried out.