In some cases it might be more appropriate to apply to the Court for an order that the company be placed into liquidation. There are various reasons for this but in some cases it is more cost effective than the voluntary liquidation route especially if there are insufficient assets to meet the costs of the liquidation.
The procedure is straightforward and involves filing various documents with the Court and following a procedure that is set out in the Insolvency Rules 1986.
The key differences between voluntary and compulsory liquidation include:
|Voluntary Liquidation||Compulsory Liquidation|
|Going into liquidation||Hold a shareholders' meeting||Court Procedure|
|Who can start the process?||Directors resolution, shareholders special resolution||Director, creditor, company etc petition|
|Liquidator||Choice of the shareholders or creditors||Official Receiver|
|Report on Directors' Conduct?||Liquidator||Official Receiver|
|Costs||Paid out of assets of company||Paid by petitioner|
Directors should always consult a Licensed Insolvency Practitioner as soon as they become aware that their business is in financial difficulty. Gore and Company can help in a variety of ways:
- We can complete a rapid review of the business and advise on the most appropriate course of action
- We can assist you to make the application to the Court for a winding up petition. Contact us for a free estimate of costs.