How to prepare a company for liquidation
Prepare for liquidation by protecting company assets, assembling complete financial records and obtaining advice before making unusual payments or transfers. The immediate aim is an accurate handover and a clear decision about trading, not emptying the bank account or disposing of property.
Business Insolvency Helpline • Checked 1 November 2026
General guidance, with procedural detail focused on England and Wales. Rules and routes can differ in Scotland and Northern Ireland.
Which documents will be needed?
- Recent accounts, management figures and access to accounting records.
- Bank statements and a list of all accounts and payment providers.
- Creditor balances, tax records and details of disputed debts.
- Customer debts, contracts, leases, guarantees and finance agreements.
- Asset ownership records, valuations and employee payroll information.
Identify missing items early. Explain where records are held and who can provide them rather than guessing figures to make the paperwork appear complete.
What is a statement of affairs?
It summarises the company’s assets, debts and creditor position at a specified date. It is not simply a copy of historic accounts: expected sale values and security over assets matter. In an England and Wales CVL, directors’ statement-of-affairs requirements include verification by a statement of truth.
Separate estimated amounts from confirmed balances. Flag contingent liabilities such as guarantees, litigation or contract termination claims.
What should happen before the appointment?
Agree how to secure stock, equipment, premises and electronic records. Review insurance and access arrangements. Obtain advice about wages, customer deposits and whether any further work can be completed without worsening creditor losses.
A disagreement between directors does not remove these responsibilities. Check voting rights, the articles and the available procedure with the proposed practitioner. Do not assume one director can complete every step alone.
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Related questions
You cannot act as its liquidator without the required authorisation. A CVL needs an authorised insolvency practitioner; compulsory liquidation follows a court process.
Do not give yourself priority without advice. A repayment before insolvency may be challenged depending on the circumstances.
No. Agree record retention and access with the liquidator. Keep evidence requested for the case and comply with applicable retention duties.
Sources checked for this guide
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