Company shut down procedures

In these hard economic times business is very hard. If you are a company director looking for a bit of advice because your business is struggling, you have come to the right place. I have created many articles which try to help a director take the right steps in either closing his business or pre-packing a sale and starting again.

Firstly if your company is insolvent you have a duty as a director to close the company and not incur any further debt, unless you can be pretty sure that you can put in place a rescue plan to turn that business around. If you can’t then you need to liquidate the company yourself or take professional advice on how best to close the business in an orderly fashion.

By far the most popular choice is to engage an insolvency practitioner to call a meeting of creditors on your behalf, prepare the statement of affairs, hold the meeting and then deal with all the procedural aspects necessary to make sure all creditors now what is going on and how they can participate in any dividend. This is called a creditors voluntary liquidation, as the creditors vote to close the company.

There is a fee for all this and generally it will be about £5000 whoever you use around the country. There are some advertisements for liquidations at less than this but by the time all costs are accounted for, it will still come in at about the same sum.

These costs can come out of the assets of the company and indeed many businesses do have just enough assets or cash to take this final step. For many businesses, the central core of what the business does is still profitable and so often directors will want to continue to trade. This is easily possible and a sale of assets can be arranged to a new company and a lease re-assigned by a landlord, which often leaves the new company trading on in the same line of work from the same premises.

If you would like help with liquidating your company, call now.

Source by: Steve Thatcher
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