Liquidation
What is Liquidation?
Liquidation can be used in several contexts. Liquidation can refer to both insolvent company liquidation and solvent company liquidation. Liquidation can also refer to the sale of unwanted or surplus stock or assets, known as asset liquidation.
The use of Liquidation in the context of insolvent company closure is the technical use of the term Liquidation as laid out in the Insolvency Act.
The liquidation of an insolvency company is the more formal use of the term liquidation.
Company Liquidation can refer to both an insolvent company liquidation and a solvent company liquidation.
Insolvent Liquidation refers to a process where company liquidation is use to close down a company where it is unable to pay its creditors (those who it owes money to) in full. This is either a Creditors Voluntary Liquidation or a Compulsory Liquidation.
Solvent Company Liquidation refers to a company liquidation where the company assets are distributed to the shareholders of the company in a tax efficient manner. This is a Members Voluntary Liquidation.
Learn more about Company Liquidation Types.
Liquidation can refer to the liquidation of assets into cash. This could be the liquidation of excess stock or company assets that are no longer required. More often than not excess stock is liquidated through internet auction sites.
Asset liquidation takes place as part of a company liquidation but asset liquidation can also take place outside of company liquidation.
At Insolvency.com we can provide Liquidation help to provide answers and solutions to company questions.
Liquidation help is crucial in understanding the best solution to use for your company’s situation.
Insolveny.com recognises the importance of giving clear explanations of the various insolvency and rescue processes available. As licensed insolvency practitioners we are able to advice on and transact all aspects of personal and business insolvency matters.
Liquidators
Liquidators act to close down either an insolvent company or a solvent company. Liquidators need to be Licensed Insolvency Practitioners. At Insolvency.com Licensed Insolvency Practitioners will advise you on the various options open to your company.
Liquidators act as a Liquidator of a company for a Creditors Voluntary Liquidation, a Compulsory Liquidation and a Members Voluntary Liquidation.
A liquidator’s principal role is to realise value for all assets of a company and to distribute the cash realised to creditors in the order laid out under law.
A Liquidator is also sometimes referred to as someone who liquidates assets outside of formal insolvency.
A Liquidator may sell excess or surplus stock or assets. Such Liquidator may be referred to by their asset specialisation for example furniture liquidators or computer liquidators.
Role of Liquidators
The role of liquidators who act with regard to formal insolvency procedures is governed by insolvency legislation. As such for the role of liquidators to be undertaken in relation to company liquidation then the liquidator must be a licensed insolvency practitioner.
The role of liquidators is regulated by the licensing body of the insolvency practitioner concerned.
A Liquidator acting outside of formal insolvency procedures will probably be acting to sell assets in behalf of a company or business.
Liquidate
Should you wish to liquidate a Limited Company then you will need to use a Licensed Insolvency Practitioner. At Insolvency.com we are Licensed Insolvency Practitioners who will advise you on the various options open to you.
Several processes exist to liquidate a company. The most appropriate process to use to liquidate a company will depend on whether the company is solvent or insolvent.
An insolvent company can use either a Creditors Voluntary Liquidation (CVL) or a Compulsory Liquidation to liquidate itself.
A solvent company can use a Members Voluntary Liquidation (MVL) to liquidate itself.