How Much to Liquidate My Company

How Much To Liquidate my company? Written by John A Waller. Consultant. Reviewed: July 14th, 2024.

How Much Does it Cost to Liquidate a Company?

The cost of liquidating a limited company can vary depending on its size and complexity.

Fees range from £3,000 plus VAT and disbursements upwards.

We have committed to creating a cost guide that meets specific criteria. Our experienced team has provided the estimates detailed below for your perusal.

Our team of  licensed Insolvency Practitioners remain regulated by the Insolvency Practitioners Associated IPA

Small trading company – CVL Circa £3,000 plus disbursements: –

  • Qualifying criteria of no more than two directors and shareholders.
  • No: –
    • employees.
    • Assets.
    • Finance agreements.
    • Pensions.
    • Overdrawn director’s loans.
  • Up to 10 creditors.

Small to medium company – CVL Circa £4,000 plus disbursements: –

  • Assets valued under £5,000.
  • Maximum two employees.
  • Upto 10 Creditors, including HMRC.
  • No finance agreements.
  • No Pensions.

Medium size company – CVL Circa £5,000 plus disbursements: –

  • Any assets valued over £5,000.
  • Finance agreements;
  • Warranties.
  • Pensions.
  • Creditors from 16 to 35.

Large company – CVL Circa £6,000 plus disbursements: –

  • Fixed Assets – property, leases etc.
  • Creditor claims – Significant and Complex.
  • Any pending litigation cases.
  • Disputes between shareholders & directors.

To find out more, please call John Waller on 0800 612 5448.

Liquidation Disbursements

Any disbursements that require paying will be in addition to the Liquidator’s fees. In addition to the basic liquidation fee, the liquidation also includes these disbursements: –

  • The Insolvency Practitioner’s Bond is a type of disbursement based on the company’s assets that must be bonded, as required by law. This amount can differ depending on the company.

In addition to standard advertising, there will be Statutory Advertising, which typically costs £87.30 plus VAT for each advert required. The company’s directors place an advert to notify the public of the appointment of a liquidator or for the company’s resolutions to begin the liquidation process. Most notifications are mandatory statutory.

If you are considering Liquidating your company, remember that additional disbursements can apply depending on the case.

Who remains responsible for paying for the liquidation of a company

Choosing voluntary liquidation is a process whereby a company pays to have itself wound up and dissolved. When a company faces involuntary liquidation, fees remain the responsibility of the party who petitioned to have the company wound up.

Operating an insolvent company requires you to cease trading, wait for a creditor to petition to wind up your company in the courts, and then compulsory liquidation. You should never forget that if your company is insolvent, you, as the director, have a legal obligation to stop any further losses and not do anything that could worsen your creditors’ position.

Allowing the company to keep trading when you are aware it is insolvent. This would breach your duties as a director, and you could face several consequences. If you act irresponsibly, you could be held liable for company debts or disqualified from acting as a director in the future.

If your company is insolvent, you must seek the advice of an insolvency practitioner for help and guidance. The team of professionals at HBG Advisory can help you understand your options and propose the most suitable course of action for you and your company.

Finding the funds to cover liquidation costs

Outstanding overdrawn director’s loans remain classified as company assets. However, the liquidator will collect this from you as part of the process.

An overdrawn directors loan account means you have taken money from the company without recording it as a salary or dividend payment. Consequently, once the company liquidates, you will be asked to repay this money to the company, as other outstanding debtors.

However, You could arrange with the liquidator that the money you repay towards the overdrawn director’s loan forms part of the liquidation fee. The appointed insolvency practitioner can discuss waiving the overdrawn director’s loan based on your current ability to repay the company.

If you take a regular salary from the business through PAYE, the director of a limited company may also be classified as an employee. If so, you could be entitled to a redundancy payment if your insolvent company enters liquidation, enabling the introduction of working capital during a financially demanding time.

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