There are several important aspects to consider if you liquidate your limited company. See how limited company liquidation works, be it compulsory or voluntary, and the role of a director and a liquidator.
As a general rule, liquidating a company is best carried out by legal professional (e.g. a solicitor). Even so, you can wind up a limited company yourself providing you follow the correct processes.
WINDING UP A LIMITED COMPANY: There are specific procedures to follow if you choose to liquidate a business yourself.
Liquidated companies get removed, also called 'struck off', from the register at Companies House.
From then on, the company stops trading as a business and no longer employs people.
In simple terms, the business would then cease to exist. As a rule, the business assets get sold to pay off any debts when you are liquidating a limited company.
If there is any money left, it would go to the shareholders. But, you cannot access the company bank account without a validation order.
Shareholders must share the money before the company gets struck off the register. Otherwise, it those funds would go to the state. You would need to restore a dissolved company to claim back that money after it got removed.
Note: In some cases, creditors can force a limited company unable to pay its debts into liquidation.
A company director can make a proposal to stop trading and get liquidated. In this case the company would get 'wound up' if either:
You must get an agreement from the majority of the shareholders to wind up a company. That means calling a meeting of all the shareholders and asking them to cast a vote.
By value of shares, 75% of the shareholders must agree to the winding-up process. This is the only way to pass a company 'winding-up resolution'. Following a successful resolution, there are 3 important steps to follow:
Note: When you liquidate a business yourself, the role and responsibilities of a company director change after appointing a liquidator.
Check how a director can apply directly to the court to get a compulsory liquidation order. Winding up a company means it gets liquidated (wound up) because the business ceased trading.
The page explains what happens to directors after their company gets liquidated. Extra details clarify how to gain access to a company bank account after it gets frozen.
There are several reasons for not wanting to run a company any longer - even if it is solvent. The section explains the process of members' voluntary liquidation (MVL) of a company.
The role of the liquidator is acting as an authorised insolvency practitioner. So, a liquidator is the official receiver who conducts the limited company liquidation process.
Once liquidators get appointed they take over the control of the business. That means when you are closing down a limited company the official receiver will:
Note: A liquidator will act for the interest of the creditors in a creditors' voluntary liquidation - not the directors.
How to Liquidate a Company Yourself in the United Kingdom