If you are a director that is worried about liquidating a company and money is tight, you maybe looking for the cheapest way to liquidate a company.
As company closure is a complex process subject, it is governed by law and with a number of various rules and regulations also included.
Consequently, it is not something that can be done cheaply. Should there be no cash at bank and you cannot afford a liquidation and need a more cost effective procedure. We look at your options
Liquidating your company at a low cost
Liquidating your company doesn’t have to be an expensive process, contrary to popular belief. While you will still have some costs associated with the liquidation, such as paying a licensed insolvency practitioner and any taxes that may be due, it is possible to do it relatively cheaply.
However, you need to be careful of any options that appear too good to be true. Any company that claims they can liquidate your company for a very low cost may not be operating within the law, and you could find yourself in hot water if you use their services.
So, while it is possible to carry out a cheap company liquidation of your company without breaking the bank, you need to be cautious and make sure you are getting legitimate help.
You can sell the business assets to help fund the liquidation by selling the company assets. The proceeds from the sale will then be used to pay off creditors and the Insolvency Practitioners fees, in order of priority. This will allow the liquidation to be done cheaply without cost to the directors.
- Company directors receive redundancy payments. Directors can claim redundancy if they have been employed by the business for over two years and are also on the PAYE account of that business.
- Sit and wait for creditor to force the company into a compulsory liquidation. This cheap option doesn’t actually cost you anything. It takes a long time and can be stressful dealing with the official receiver.
- If there are no assets in the company and no creditors there is no need to carry out a voluntary liquidation, simply strike the business off.
Avoiding cheap liquidations by unlicensed insolvency ‘experts’
Common practice within the industry is for unlicensed and unregulated insolvency ‘specialists’ to charge you a fee upfront. Once you have paid a fee they will simply refer you to a licensed IP to carry out the process, so essentially you’re paying twice.
Directors need to be aware that to avoid problems in the future, you also need to be aware of advice that are commonly offered by unregulated insolvency advisors, these including:
- Company dissolution only costs £10, but it’s highly likely that HMRC and/or other creditors will object to the application on the grounds that they’re owed money. Advisors are unlikely to tell you that the company can be reinstated to the register if creditors object and directors can face unto a 15 year disqualification and be help liable for the debts personally.
- Pre pack administration involve directors of a failed company purchasing their business assets and setting up a new limited company without the debt. This practice is highly regulated procedure. Assets will need to be professionally valued by a registered valuer. It is illegal for a business to purchase its own assets undervalue, this leave future action from the creditors against the directors.
- A court liquidation is the practice of taking money from you and then winding up your company through the court is sometimes known as a directors petition. Some courts may allow this if both parties are creditors, but other’s will reject it for being an abuse to process
- Saying that directors redundancy will settle the costs, this means when directors are made redundant in the event of a liquidation, it is possible that they will receive some form or payment from their employing company.
Fixed price liquidation
Fixed price liquidation refers to a type of asset sale where all items are priced in advance and sold at a fixed price. This method is often used in retail settings or by companies looking to quickly liquidate inventory or assets. Fixed price liquidation sales offer several advantages over traditional auction-style sales, including the ability to move large amounts of inventory quickly and the assurance of a guaranteed sale price.
Additionally, fixed price liquidation can be a more efficient and convenient option for buyers, who are able to purchase items immediately without the uncertainty and time-consuming process of bidding in an auction.
Read more: Cheapest way to close a limited company
Seek affordable liquidators advice
Inexpensive closure of a limited company is possible, even when it has debts. Directors need to simply follow insolvency regulations and act quickly with the best interests of creditors in mind when they request the help of the cheapest liquidation company.
If your business is suffering and you are looking at the cheapest way to liquidate the company, please make contact and one of our affordable liquidators will run you through the process of company closure.
Simply contact the above number or complete the online enquiry form one of our affordable liquidations expects will return your call.
Read more: How much does it cost to liquidate a company
Conclusion
The cheapest way to liquidate a company is to dissolve it voluntarily and distribute the remaining assets among the shareholders. This can be done through a process known as a “members’ voluntary liquidation,” which is a formal way of winding up a solvent company. In this process, a liquidator is appointed to realise the company’s assets, pay its creditors, and distribute the remaining funds to the shareholders.
This process is usually quicker and cheaper than other forms of liquidation, such as compulsory liquidation, which is initiated by a court order. It is important to seek professional advice before deciding to liquidate a company to ensure that the process is done correctly and legally.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.