How long does voluntary liquidation take?
There are two types of voluntary liquidation method. Members Voluntary Liquidation and Creditors Voluntary Liquidation:
- Members Voluntary Liquidation - instigated by the members of a solvent company in order to appoint a liquidator to liquidate the assets of the company or companies in liquidation by way of liquidation sales, so that the proceeds of the liquidation sales can be distributed amongst the members in accordance with their shareholding, and the company removed from the Companies Register;
- Creditors Voluntary Liquidation - an insolvent liquidation process. Creditors liquidation is instigated by the company itself and will be used when the company finds that it is either unable to pay its debts as and when they fall due or it is balance sheet insolvent and there is no other option for the company but to go into creditors liquidation. It will also eventually be removed from the Companies Register.
In both Members Voluntary Liquidation and Creditors Voluntary Liquidation a liquidator is appointed over the company or companies in liquidation. The liquidator oversees the company liquidation process and is responsible for collecting in the assets of the company and distributing these.
In a Members Voluntary Liquidation there will typically be less creditors owed money than in a creditors liquidation. It is therefore usually more straightforward, and therefore faster, in a Members Voluntary Liquidation to pay the creditors owed and then distribute the surplus to the members by way of the statutory order.
In a creditors liquidation, there can be any number of creditors who need to make a claim in the liquidation of a company in order to be repaid. The liquidation process for the liquidator can take quite some time in finding out who are the creditors of the company or companies in liquidation, and how much they are owed. Once the liquidator has determined all the monies owed by the company to creditors, then it will take some time to distribute the proceeds of liquidation sales to those creditors following the statutory ranking order which a liquidator of a company liquidation must follow.
The answer therefore to how long does voluntary liquidation take is it will be very much dependent on the company, the complexity of its creditor situation and the complexity of its financial circumstances.
Contact the company liquidation experts today
The expert team of liquidation lawyers at Francis Wilks & Jones act in voluntary liquidations on a daily basis and are mindful that this can be a stressful process that should be undertaken as quickly as possible. If you would like to discuss your own company’s situation with an expert in our team contact us today.