There are many different ways to wind up a limited company but the most common is by liquidation. Liquidation involves a thorough investigation into the company’s assets, debts and liabilities in order to make sure it is solvent before it’s closed down and the funds distributed among its creditors. This process can take a considerable amount of time and requires expert advice from a licensed insolvency practitioner, so it is crucial to seek professional help if your business is struggling.
Nevertheless, there are some unlicensed insolvency ‘experts’ who claim to be able to liquidate companies cheaply and quickly. However, these claims should be treated with extreme caution. Liquidating a company is a complex procedure with various rules and regulations that must be followed, which is why it’s best to work with professionals who have your company’s best interests in mind.
If your business is experiencing financial difficulties, it can be difficult to accept that the company is no longer viable. It’s even harder to think about letting your employees go or handing over the keys to your premises. Despite the grief you’ll feel, it’s important to know your options and take the appropriate action to resolve your situation as soon as possible.
A cheap insolvency practitioner is an insolvency firm offering low fees for liquidations and pre packs. This is a common scam and should be avoided at all costs. These firms will quote a low fee to get you in and then refer you on to a fully licenced insolvency practitioner for an additional fee. This can cost in excess of PS7,000.
It is essential to choose a reputable insolvency practice when considering a cheap liquidation as there are many hidden costs that you will not be aware of. These include liaising with creditors and ensuring that all steps are taken to comply with the relevant laws. This will minimise any potential issues that may arise and ensure a smooth liquidation.
The cheapest liquidation for an insolvent company is a Members’ Voluntary Liquidation (MVL). This can cost as little as PS3,000 plus VAT, and is the most cost effective solution when your company has minimal debts and few creditors. A MVL can be implemented by an insolvency practitioner or you can apply for company dissolution and strike the company name off at Companies House. However, this method can lead to reinstatement if you fail to notify creditors, and does not give you the reassurance that a licensed insolvency practitioner will be involved in the process.
The cheapest way to close your company is to allow a creditor to force the company into compulsory liquidation. This can be expensive, but it does remove the risk of a reinstatement and gives you peace of mind that your company’s actions are being monitored by an insolvency specialist. It also frees up cash from book debts and director loan accounts to pay the liquidator’s fees. It’s worth remembering, though, that this route does not protect you from personal liability to your creditors and will expose you to a criminal record.