What is a Voluntary Liquidation UK?

A company can be put into liquidation if it is not trading and has no active debts or liabilities. This process is known as a voluntary liquidation uk and it is one of the formal processes of closing a company down. Companies that are in serious financial distress can benefit from talking to business consultants early to see if there are any ways the problem can be remedied and avoid the need to go into liquidation.

Directors of a company in liquidation have the power to nominate an authorized insolvency practitioner to be their liquidator. They also have to call a general meeting with shareholders and pass a resolution for voluntary winding up. Once this is done the liquidator can then start realising assets settling creditors’ claims (there is a set order of priority) and distributing any surplus money to shareholders. Creditors are entitled to statutory interest on their claims from the date the company went into liquidation.

Saving Money on Liquidation: Tips for Cost-Effective Voluntary Liquidation

Creditors and members still have the right to petition the court to convert a voluntary winding up into a compulsory liquidation. The petition must be accompanied by a report from the liquidator. The court may then examine the conduct of the liquidator and, if found guilty of misapplying or retaining any money or property belonging to the company or of breaching any fiduciary duty, compel him to repay, restore or account for it. In addition, the court can order the liquidator to pay costs of the petitioners and make an award of expenses to the official receiver.

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