ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The process of liquidating a company

Updated on February 1, 2016

In recent years there has been a massive resurgence of people starting out a business on their own in an attempt to better themselves. Whilst this is a noble aim and goal, for a lot of people it came directly from the impact of the international banking crisis.

Unfortunately the very same banking crisis that caused so many to set out on their own has also led to many companies failing to keep their business afloat. Please note that liquidation applies to limited companies whereas administration applies to larger companies, such as national stores, football teams etc.

What is company liquidation?

In effect, company liquidation is a way in which assets of a company are dissolved. This is not a decision that should be taken lightly since in effect, it means that the company is no longer allowed to carry on trading.

This process involves various steps with the first being that (as mentioned above) that the company ceases all trading. This is done legally by contacting Companies House and informing them in written notice that the company is entering the first stages of liquidation.

After this, the more in depth work begins. This entails settling the final business proceedings the company currently has and can take up to a year for all of this to be finalised. The liquidator at this stage will effectively run the business for you for these previous commitments to ensure that the tasks are carried out correctly during this trying time.

Such tasks would include finishing any work that the company has taken on (and been subsequently paid for) to ensure that there are no legal claims made against the company. The reason why the work would be finished is that since the company is liquidating due to cash flow problems, it cannot simply give the clients their money back.

However the liquidator will also go through the financial records of the company to assess if there is any money that can be retrieved from the now defunct business. This could mean selling off any assets that will no longer be needed and some monetary valued could be gained from the proceeds of a sale. This may include things like high tech equipment such as laptops, tablets etc. It may also include any vehicles that are paid off, but registered under the company. This could go some way to paying off the debt that the company has generated.

The liquidator will also assess though if there are any companies that are in debt to the now defunct one. Whilst it is true that once a company enters liquidation that it can no longer trade, this does not mean that anyone or any company that owes the liquidated money has got off lightly.

Rather, they will still be legally entitled to pay the liquidated company what it is owed. The difficult exception to this rule would be in the case whereby the company which owes money to the one which is liquidated has either entered liquidation or administration itself. In that regard it will be much harder to recoup some of the funds in this scenario. However, this is something that the liquidator will pursue at great lengths to ensure all debts are paid back be it in part or in full.

Hiring a professional liquidator

Whilst this is a highly stressful and trying time for the business owner as well as the employees (if applicable) it is a necessity to hire a liquidator since they will carry out the processes listed above. However, as with any process involving a company, this procedure is not free of charge.

To that end it is important that a qualified and professional liquidator is employed to make the final transitions of the company as smooth as possible. The process should also not be dragged out for longer than need be, which would only be in cases where the liquidator wishes to further increase the amount of money that they make from the ending of your business.

There are various company liquidation services in the UK (a quick Google search of 'company liquidation services UK will give plenty of results', many of which offer free and impartial advice in the run up to liquidation, as well as being able to provide the service of carrying this task out. Whilst it is a sad and distressing time, having impartial guidance such as this is highly beneficial since it can make the whole process a lot easier to cope with business wise.


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)