Liquidations

At Francis Wilks & Jones our expert liquidation team has seen every type of liquidation situation possible over our many years’ experience acting for clients facing all types of liquidation.  In all situations, taking expert advice early is vital to making the process as pain free as possible.

A. Compulsory liquidation / winding up

You may have been served a winding up petition by a creditor and are worried what to do.  Whatever the situation, it is vital to act fast.  There are options available that can safeguard your company and you, but these options reduce the longer you leave it.

If you are served with a winding up petition and ignore it, the ramifications can be fatal:

  • once the petition hearing is advertised, your bank is likely to freeze your account, making paying staff, landlords and suppliers impossible;
  • once advertised, the adverse publicity can have a serious effect on your ability to raise credit, whether the petition is valid or not;
  • even if the debt can be disputed, another creditor may ‘take over’ the petition if they are owed money.

If a winding up petition is granted, this will effectively bring an immediate end to the company.  A liquidator will be appointed to collect in and distribute assets, and the directors and shareholders will no longer have control.  Your actions as a director will be reviewed by the liquidator.  Anything considered misconduct will be reported for the purposes of a directors disqualification review, and the liquidator may come after you personally for money if he thinks it is necessary.

However, if you take the right action early on, the above can be greatly mitigated, or avoided altogether.

How the FWJ team can help you

At Francis Wilks & Jones our expert team has many years of experience of acting for companies facing winding up.  We can take action to stop the advertisement of the petition with the drastic consequences this can bring.  We can help you get access to a frozen bank account to ensure key payments can continue, and we can help fight any petition if it is disputed.  Contact our friendly team today to discuss how.

B. Creditors voluntary liquidation / winding up

It is an unfortunate fact that many companies are currently facing a difficult financial future. If this is you, then it may be time to consider whether placing your company into voluntary liquidation is now the right action to take. 

How the FWJ team can assist

At Francis Wilks & Jones our team of liquidation experts have many years’ experience acting for all types of companies, helping them go into liquidation.  While this is never an easy decision, finally making the decision that your company must be wound up, preventing further debts being incurred that the company realistically won’t be able to pay, can in many ways be a welcome relief to struggling directors and shareholders.

We work with the best insolvency practitioners in the country, and can guide you through the process to make it as pain free and fast as possible, protecting you as directors and shareholders along the way, and opening up the future to you to start afresh.  Contact our expert team today to discuss how when and how to move forward.

C. Members voluntary liquidation/winding up

If you are in the fortunate situation of having a solvent company but you want to end it and move on to something new, then our team of voluntary liquidation experts at Francis Wilks & Jones can help you to do this swiftly and efficiently.

Unless the company has no assets or debts, then simply taking it off the Companies Register is not a viable option.  The team at Francis Wilks & Jones work alongside expert professional liquidators to guide you through the process to ensure your company is wound down efficiently, with no future comeback.  Contact our expert team today if you would like to discuss this further.

Whatever your situation – we can help

Do feel free to call one of our friendly team of advisers for a confidential call on any of these issues.

In the meantime, we have also set out below our answers to the common questions we get asked on this subject. We hope you find these useful.

 


Common questions answered

1. What does liquidation mean?

The term liquidation is used a lot both in the news and in business, but at Francis Wilks and Jones we are often asked what does liquidation mean? Liquidation is a term that can cover several different liquidation processes and we set out below some more detail on each of the company liquidation processes to explain.

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2. Why do companies go into liquidation?

We see many types of company liquidation at Francis Wilks & Jones, and we are instructed by companies wanting to go into liquidation or directors wanting to liquidate my company for any number of reasons. We set out below some of the reasons why a company may go into liquidation.

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3. How to liquidate a company

At Francis Wilks & Jones we are instructed by a variety of different entities on how to liquidate a company. This can be by the owners of the company who want to effect an orderly wind down, or by creditors owed money from a company who are being ignored, or by directors of a company that should go into liquidation because it is unable to pay its creditors and needs to cease to trade.

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4. How long to liquidate a company?

We are sometimes approached by directors considering Creditors Voluntary Liquidation in order for their company to go into liquidation, or by creditors who are owed money by a company and are considering liquidating a company in order to recovery their monies, who want to know how long to liquidate a company?

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5. How does liquidation affect directors?

At Francis Wilks and Jones we frequently advise directors of a company that is either in liquidation or considering going into Creditors Voluntary Liquidation, on their own personal position as a director of a company in liquidation. Our expert team has vast experience of advising company directors on what they can and can’t do both before, during, and after the company liquidation process. Contact us for advice on your position as a director if you have concerns.

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6. What happens to employees when a company goes into liquidation?

What happens to employees when a company goes into liquidation will depend on the type of liquidation and what happens in the liquidation process. However, in almost all liquidation situations, the employment contract will come to an end. Liquidation is a process commenced in order to liquidate assets and bring about the end of a company. However, there are certain additional rights for an employee on a company’s insolvency, and we set out the position below in more detail.

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7. Can I be a director of a company after liquidation?

At Francis Wilks & Jones our team of specialists are often instructed to act for company directors already in a company liquidation process, or considering liquidation, who are concerned about their future position as a director after they have been involved in the liquidation of a company.

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8. What is liquidation value?

We are often approached by either members or shareholders of a company, or a creditor of a company in company liquidation, or by directors of a company or companies in liquidation who ask what is liquidation value, and is this different from market value?

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9. Liquidation value versus going concern sale

In a company liquidation situation, be it Members Voluntary Liquidation, Creditors Voluntary Liquidation or a compulsory liquidation, inevitably liquidation sales will take place as a way to liquidate assets and bring money back into the company to pay creditors. How those liquidation sales take place and what is the liquidation process is something that is not always understood. We set out below the difference between liquidation value versus going concern value, as this is an issue that often arises in a company liquidation sales situation.

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10. What does it mean when a company goes into liquidation?

To go into liquidation is a term that is heard a lot, but not everyone is clear on what does it mean when a company goes into liquidation. To go into liquidation is a phrase that can refer to a variety of different liquidation processes. We set out below more detail on how a company can go into liquidation.

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11. What does liquidation of a company mean?

Company liquidation or liquidation of a company are terms used frequently but what does liquidation of a company mean in practice? At Francis Wilks & Jones, and we are often instructed by companies who might want to go into liquidation but are not sure what this means for them and if this is the right process for them.

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12. How long does it take to liquidate a company?

Directors and creditors who are thinking of putting a company into liquidation will often ask the team at Francis Wilks and Jones for an idea of how long this might take, before making the decision to liquidate my company, or looking at the court process of the liquidation of a company that owes a creditor money.

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13. How much does it cost to liquidate a company?

A company in financial difficulties looking at possibly liquidating a company and enquiring about company liquidation process will inevitably have concerns about liquidation costs, liquidation fees, and how much does it cost to liquidate a company.

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14. How long does liquidation take?

Clients considering putting a company into liquidation are often interested to know how long does liquidation take, as this may affect their decision.

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15. How long can a company stay in liquidation?

Directors and creditors and shareholders of a company in company liquidation are often anxious to know how long the process takes and how long can a company stay in liquidation? Under insolvency legislation there is no fixed time within which a liquidation must take place, but it is in the interests of all parties that the liquidation process is completed as soon as possible once a company has decided to go into liquidation, or once a company has been put into company liquidation by a creditor using the compulsory liquidation process.

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16. Can you start a new business after liquidation?

At Francis Wilks & Jones our company insolvency and litigation teams have an outstanding reputation for acting for directors and business owners who want to start a new business following a liquidation of their previous company. We can provide advice and direction on how to successfully start a new business after liquidation.

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17. Liquidation meaning in accounting

Clients at Francis Wilks & Jones who are business owners sometimes experience confusion around the term liquidation, and particularly whether this has a different meaning in accounting. The term liquidation is a generic term covering several different types of company liquidation process, which all have their own meanings and effects. We explain more below.

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18. Types of liquidation

At Francis Wilks & Jones we are often instructed by clients who wish to put their company into liquidation. However, the term liquidation is wide and covers three types of liquidation, all of which follow very different liquidation processes.

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19. What happens to contracts when a company goes into liquidation?

Any directors or business owners considering whether to liquidate my company, or any creditors or suppliers of a company that is approaching company liquidation and may be about to go into liquidation will want to know what happens to contracts when a company goes into liquidation?

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20. What happens to shareholders when a company goes into liquidation?

At Francis Wilks & Jones our team of expert company liquidation lawyers act for all types of stakeholders when dealing with a company liquidation, including not only creditors and directors, but also shareholders of a company. Our clients want to know what happens to shareholders when a company goes into liquidation.

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21. Can a company in liquidation still trade?

Whilst the liquidation of a company usually means the immediate cessation of trade, this is not always the case. It is possible in certain circumstances for a company in liquidation to continue to trade if it is more beneficial for the creditors to do so. We set out below some of the circumstances and the considerations that need to be taken into account if it is intended to continue to trade during a company liquidation.

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22. Does liquidation affect credit rating?

A company director or business owner will inevitably have concerns as to whether a company liquidation process might have an affect on their own personal credit rating. If you are a business owner trying to decide whether to liquidate my company, but have concerns on your own personal credit rating following the liquidation of a company, then we set out some considerations for you below.

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23. What happens when a company goes into liquidation?

We are frequently asked to advise both companies and creditors on what happens when a company goes into liquidation on a practical basis? Our team of experts at Francis Wilks & Jones deal with company liquidation daily, and set out below some of the effects of a company liquidation and what happens when a company goes into liquidation.

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24. What happens after liquidation?

There is sometimes confusion as to what liquidation actually means for a company, and what happens after liquidation of a company takes place. We set out below some of the consequences of liquidation and what happens to a company following the liquidation process.

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25. Capital gains tax on liquidation of company

When making the difficult decision to liquidate my company, directors and members of a company may have concerns about the capital gains tax implications of the liquidation of a company. We discuss some of the implications below.

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26. Can a liquidation be reversed?

We are sometimes asked at Francis Wilks & Jones, can a liquidation be reversed?

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27. What does liquidation mean in business?

In the UK a company or a partnership can go into liquidation. Therefore when we are asked ‘what does liquidation mean in business’? this usually refers to the liquidation of a limited company or a partnership. It will not refer to a person or a sole tradership, who must go into bankruptcy instead.

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28. What does liquidation of a company mean?

Liquidation is a term that is used for a variety of different processes in business. It is usually thought that a liquidation involves only an insolvent company, but it can involve a solvent company too as a means of bringing that company to an end. We set out below some of the key points by way of explanation on what does liquidation of a company mean.

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29. Liquidation of company meaning

We are often approached by directors, shareholders and creditors of companies and asked the liquidation of company meaning? Liquidation is a wide term that covers a variety of company processes, involving both solvent and insolvent companies. Below is some explanation around liquidation of company meaning.

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30. Liquidation meaning business

At Francis Wilks & Jones we are approached by business owners who want to know the meaning of liquidation and whether this might be a suitable process for them. Liquidation is a generic term which covers several different types of company liquidation, and whilst these are similar in many ways, there are some differences in the liquidation process and the effects.

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