In more detail
Advantages of Liquidating a Limited Company
- It stops the company trading and brings it to a formal close.
- We deal with your creditors direct and help any employees claim from the Government’s Redundancy Payments Service.
- There is no longer a need to file VAT or PAYE returns nor complete and file annual accounts.
- It does not normally affect your credit rating as a director.
- Unless you have guaranteed debts like bank loans then you have no personal liability.
- Liquidation can all be done in 14 days online.
- You can, in some circumstances, buy the assets back and start again.
Disadvantages of Liquidation
- You lose control of the company as it will close.
- The assets will be sold to pay the creditors first before shareholders.
- If you owe money to the company like on a director’s loan account you will have to pay it back.
- If this is your third liquidation within five years you may be liable for the company tax debts (if the tax debts are more than half of all debts).
Why Do Businesses go into Liquidation?
- Loss of a major customer.
- The business is loss making and cannot be turned around.
- The directors are finding it hard to cope with the stress and pressure of trading.
- The directors are worried they will be liable for wrongful trading if they carry on so want to close.
Employees owed redundancy, unpaid salary, holiday pay and notice pay can claim this from the Government Redundancy Payments Service. Directors can usually claim this as well.
a word of advice
If you need help or advice please ask us any question you like. We understand you may have lots of questions.
