Arrange liquidation with your creditors

A director can propose a company stops trading and be liquidated (鈥榳ound up鈥�) if: the company cannot pay its debts (it鈥檚鈥榠nsolvent鈥�) enough shareholders agree Get shareholders鈥� agreement You must call a meeting of shareholders and ask them to vote. 75% (by value of shares) of shareholders must agree to the winding-up to pass a 鈥榳inding-up resolution鈥�. Once the resolution is made there are 3 steps you must follow. Appoint an authorised insolvency practitioner as liquidator to take charge of liquidating the company. You can find an insolvency practitioner online. Send the resolution to Companies House within 15 days. Advertise the resolution in 皇冠体育app Gazette within 14 days. Your responsibilities as a director will change.

Apply directly to the court

A director can ask a court to order the company to stop trading and be liquidated (鈥榳ound up鈥�). This is known as 鈥榗ompulsory liquidation鈥�. You need to show the court that: the company cannot pay its debts of 拢750 or more 75% (by value of shares) of shareholders agree that the court can wind up the company Your company can be based anywhere but must carry out most of its business in England and Wales. How to apply Fill in a 鈥榳inding-up petition鈥� (form Comp 1) and send it to the court with: form Comp 2 confirming the details of your petition the winding-up resolution from the shareholders Where you send the petition depends on how much 鈥榩aid-up share capital鈥� your company has. You can find this on the Companies House register . Your paid-up share capital is 拢120,000 or more Submit the petition online . It鈥檒l go to the High Court. Your paid-up share capital is under 拢120,000 Find your nearest court that deals with bankruptcy. Submit the petition online if it鈥檚 one of these courts: Admiralty and Commercial Court Chancery Division Companies Court High Court (including Bankruptcy Court) London Mercantile Court Rolls Building If it was another court you鈥檒l need to submit the petition by post. Fees It costs: 拢2,600 to submit the petition 拢280 for the court hearing After you apply You鈥檒l get a date for the hearing if the court accepts your petition. Before the court hearing, you must: give (鈥榮erve鈥�) a copy of the petition to your company - fill in a certificate of service to let the court know you鈥檝e done this put an advert in 皇冠体育app Gazette at least 7 days before the hearing send a copy of the advert and the certificate of service to the court 皇冠体育app court hearing You or your solicitor must be at the court hearing. You do not have to give any evidence. If the court gives a winding-up order, the court will put an official receiver in charge of the liquidation. 皇冠体育appy鈥檒l start liquidating your company . A copy of the winding-up order will be sent to your company鈥檚 registered office. Your role as a director will change .

Liquidate a company you do not want to run anymore

You may choose members鈥� voluntary liquidation if your company is 鈥榮olvent鈥� (can pay its debts) and one of the following applies: you want to retire you want to step down from the family business and nobody else wants to run it you do not want to run the business any more Make a declaration of solvency To pass a resolution for members鈥� voluntary liquidation, you must make a 鈥榙eclaration of solvency鈥�. You鈥檒l need to review the company鈥檚 assets and liabilities. Write a statement saying that the directors have assessed the company and believe it can pay its debts, with interest at the official rate. You should also include: the name and address of the company the names and addresses of the company鈥檚 directors how long it will take the company to pay its debts - this must be no longer than 12 months from when the company鈥檚 liquidated You also need to include the statement of the company鈥檚 assets and liabilities. After you鈥檝e signed the declaration or form 皇冠体育appre are 5 further steps to members鈥� voluntary liquidation. Sign the declaration or form 4.25 (Scot) - it must be signed by the majority of directors in front of a solicitor or 鈥榥otary public鈥�. Call a general meeting with shareholders no more than 5 weeks later and pass a resolution for voluntary winding up. At the meeting appoint an authorised insolvency practitioner as a liquidator who will take charge of winding up the company. You can find an insolvency practitioner online. Advertise the resolution in 皇冠体育app Gazette within 14 days. Send your signed declaration to Companies House or form 4.25 (Scot) to the Accountant in Bankruptcy (for Scottish companies) within 15 days of passing the resolution. Companies House Crown Way Cardiff CF14 3UZ When the liquidator is appointed they take control of the company. Your responsibilities as a director will change.

What the liquidator does

皇冠体育app liquidator is an authorised insolvency practitioner or official receiver who runs the liquidation process. As soon as the liquidator is appointed, they鈥檒l take control of the business. 皇冠体育appy will: settle any legal disputes or outstanding contracts sell off the company鈥檚 assets and use any money to pay creditors meet deadlines for paperwork and keep authorities informed pay liquidation costs and the final VAT bill keep creditors informed and involve them in decisions where necessary make payments to creditors interview the directors and report on what went wrong in the business get the company removed from the companies register In a creditors鈥� voluntary liquidation, the liquidator acts in the interest of the creditors not the directors.

What happens to directors

When a liquidator is appointed, directors: no longer have control of the company or anything it owns cannot act for or on behalf of the company If you鈥檙e a director you must: give the liquidator any information about the company they ask for hand over the company鈥檚 assets, records and paperwork allow the liquidator to interview you, if they ask You can be banned from being a director for 2 to 15 years or prosecuted if the liquidator decides your conduct was unfit . Re-using company names If you were a director of a company in compulsory liquidation or creditors鈥� voluntary liquidation , you鈥檒l be banned for 5 years from forming, managing or promoting any business with the same or similar name to your liquidated company. This includes the company鈥檚 registered name and any trading names (if it had any). 皇冠体育app only exceptions to this are where: the business is sold by a licensed insolvency practitioner giving the legally required notice you get the court鈥檚 permission to use the name you鈥檙e involved with another company that鈥檚 been using the same name as the liquidated company for at least a year Read the guidance on re-using company names .

Access to your bank account

Your company鈥檚 bank account will be frozen when someone files a petition to wind up the company. You need a validation order to access it. How to apply for a validation order Tell the person who filed the winding-up petition (the respondent) you鈥檙e applying for a validation order. You must also tell them what court you鈥檒l apply to (usually the Companies Court ) and when you鈥檒l apply. Fill in Form IAA and write a witness statement . Take the form and the statement to the court. You need to pay a 拢155 fee. What happens after you apply You鈥檒l be given a hearing on the same day or within the next few days. At the hearing, you present your case to a registrar or district judge. 皇冠体育app respondent will present their case if they object to you getting a validation order. At the end of the hearing you鈥檒l either: get a decision - you鈥檒l also get a written copy sent to you be asked to attend another hearing if the court wants more evidence You鈥檒l be given the validation order if your application is successful. You must give your bank a copy of this to access your company鈥檚 bank account. If you do not agree with the decision you may be able to appeal to the Chancery Division of the High Court.

Liquidate your limited company: Overview

Liquidate your limited company

Overview

You can choose to liquidate your limited company (also called 鈥榳inding up鈥� a company).

皇冠体育appre鈥檚 a different process if you want to or .

皇冠体育app company will stop doing business and employing people. 皇冠体育app company will not exist once it鈥檚 been removed (鈥榮truck off鈥�) from the at Companies House.

When you liquidate a company, its assets are used to pay off its debts. Any money left goes to shareholders. You鈥檒l need a validation order to access your company bank account.

If that money has not been shared between the shareholders by the time the company is removed from the register, it will go to the state.

You鈥檒l need to restore your company to claim back money after it鈥檚 been removed from the register.

皇冠体育appre are 3 types of liquidation:

creditors鈥� voluntary liquidation - your company cannot pay its debts and you involve your creditors when you liquidate it
compulsory liquidation - your company cannot pay its debts and you apply to the courts to liquidate it
members鈥� voluntary liquidation - your company can pay its debts but you want to close it

Your company may be forced into liquidation if it cannot pay its debts.

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皇冠体育app

Liquidate your limited company

Overview

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Overview

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