He has approached me to ask whether he would be able to dissolve the company and write off the debts (including the corporation tax due for the year ended and the VAT).
He would then look to start up a new limited company and commence trading as before with the slate wiped clean.
If for reason, a liquidator is not appointed by the general meeting, the directors shall apply to the Court for the appointment of a liquidator.
Unsecured creditors are paid on a pari passu basis, i.e. Any surplus is then distributed among the contributories of the company.
Reasons for winding up a company Members' voluntary winding up The company’s contributories (also known as members or shareholders) may pass a resolution that the company be wound up and that a liquidator be appointed.
If you’re the director of a limited liability company that goes into liquidation, you face little risk – provided that you’ve acted properly and in good time – but there are a number of consequences that you need to be aware of.
When a liquidator is appointed, most of your powers as a director will cease.
The most common times when a company director would benefit from speaking to a Liquidator (i.e.
an Insolvency Practitioner) is when they are looking to: and they want to close down their company and take their money out in the most cost-effective way.
The company’s liabilities must be paid first, any remaining surplus will then be distributed to the shareholders.
If the assets are insufficient to pay the company’s liabilities in full, the company is insolvent so creditors will only be able to receive part payment.
The liquidation process involves the closing of the accounts up to the liquidation date, coordinating with audit professionals to have all pending audits submitted and all tax returns filed and finally appointing a liquidator to have the company dissolved and eventually struck of the registry.
When a contractor is trading a limited company, there is likely to be a time when they would benefit from speaking to a Liquidator. Although the terms Liquidator and Insolvency Practitioner have negative connotations, the advice these professionals give can be of huge financial benefit to contractors.
During the liquidation you are allowed to act as the director of another company unless you are subject to a disqualification order, have given a disqualification undertaking or are an undischarged bankrupt.