The liquidation process can last for a number of years and it depends on how long it takes to realise assets and agree creditors’ claims. However, in most cases, the process lasts one or two years from the first meeting to completion.
- What does liquidation mean for my business?
- How to liquidate a company
- What’s the difference between dissolving and liquidating?
Is there a legal time limit on business liquidation?
The most common A2 liquidation has no legal time limit for when it should end, but in most cases will last between 12 and 24 months.
What is the purpose of liquidating a business?
The main purposes are getting in the assets, agreeing creditors’ claims and making a pay out to creditors if there are sufficient assets.
One other task going on in the background is an investigation into what happened and this can give rise to issues that take longer to resolve. For example, if the Insolvency Service are taking action against the directors for wrongful trading they may ask us to keep the liquidation open or we may try to recover money from someone that is disputed and legal action can in some cases take years to resolve.
Will the costs increase if the process takes longer than expected?
We take a balanced view on whether or not it is economic to keep a company in liquidation file open. If the amount to be recovered is small or it will take a long time this can often outweigh the costs of keeping the file open. In that case, we may decide to close it.
When the process is coming to an end, the liquidator will send a final report to all creditors which includes a summary of what has happened, a summary of all the receipts and payments and liquidators fees. If you’re thinking about liquidation, read our latest Advice.