What happens to my employees in a liquidation?, What happens to my employees in a liquidation?, HBG Advisory

Same Day - Initial "FREE" advice -In total Privacy online - Confidentiality Assured

Covid-19 affecting your business? Same-day Rescue & Recovery Options Available.

Free Director Advice & Support TODAY.

Our Licensed Insolvency Practitioners offer Confidential Safe Advice online.

What happens to my employees in a liquidation?

HELPING UK BUSINESSES IMPACTED BY CORONAVIRUS COVID-19

ADVISING DIRECTORS UNDER STRESS

STOP HMRC & Creditor Pressure

HMRC Tax Issues

Business Recovery and Rescue

Post COVID Return To Work Review

Bounce Back Loan Issues Sorted

Licensed Insolvency Practitioners

Book a Virtual Meeting - Free Confidential Advice
If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448.

What happens to my employees in a liquidation?

What happens to my employees in a liquidation? The outcome of your employees depends on the specific type of insolvent procedure you choose, in insolvency arrangements where the business is allowed to carry on trading, like administration. Your staff may continue to work for you. Redundancies though may need to be carried out. Read further: Employee Guide to Insolvency.

Your employer is considered insolvent if it remains unable to the debts of the company as and when they fall due or its liabilities exceed its assets. For further reading about your employees. Please read, can’t pay employees anymore.

Once the directors accept the companies insolvent position, they will then:

  • Make you redundant immediately;
  • Retain your services while dealing with matters;
  • Transfer you to a new employer.

Limited companies in the United Kingdom. There are different types of insolvency options to consider. Mainly dependent on the viability in the future for the business.

For potential viable businesses:

  • Administration;
  • Company voluntary arrangement;
  • Receivership.

Business closure:

  • liquidation

Personal Insolvency;

  • Bankruptcy;
  • Individual Voluntary Arrangement;
  • Debt relief order.

Subject to the action taken by the directors. Employees of the company may apply for support from the government for unpaid:

  • A redundancy payment;
  • Holiday pay;
  • Outstanding payments like:
    • Unpaid wages;
    • Overtime;
    • Commission.
  • Statutory notice pay.

The company ceases trading, what then?

If your company discontinues trading, your employees will be made redundant and can claim via the Insolvency Practitioners for owed wages, plus annual leave not taken. On top of this, employees are eligible for redundancy pay equal to one week for each year they have worked for the business, provided the company has employed them for 12 months. Redundancy pay remains capped currently at £479 per week (November 29th, 2020).

Former Directors of the company are additionally eligible to claim wages owed along with holiday pay and redundancy unpaid.

Will my employees receive any payout if there is no money in the company?

However, if the company is insolvent? When the company can’t afford to pay employees monies owed? Even after assets have been realised. Employee salaries, wages and holiday pay remain ranked as “preferential debts” and remain payable before other obligations are granted.

Therefore, having insufficient monies to pay what remains owed to staff means the National Insurance Fund will pay the redundancy pay and portion of the wages owed.

Please contact HBG Advisory (Licensed Insolvency Practitioners) for  employee rights when a company is insolvent:

  • Book a virtual meeting safe and private;
  • Use Web Chat at the bottom right of the web page.
Support Is Just A Call Away
Business recovery for distressed directors and limited companies.
What happens to my employees in a liquidation?, What happens to my employees in a liquidation?, HBG Advisory
What happens to my employees in a liquidation?, What happens to my employees in a liquidation?, HBG Advisory
What happens to my employees in a liquidation?, What happens to my employees in a liquidation?, HBG Advisory
What happens to my employees in a liquidation?, What happens to my employees in a liquidation?, HBG Advisory
Business Recovery & Rescue.
FREE Insolvency Advice
Sourcing New Funding

    Get Help Today
    1. Name: (*)
    2. Company Name:
    3. Telephone: (*)
    4. Email:
    5. Message:

    *Required Fields

    CALL TODAY FOR
    EXPERT CONFIDENTIAL ADVICE

    0800 612 5448

    Further Reading