If your company can no longer pay its debts when they fall due then it may be insolvent and the time has come to wind up the company. A Liquidator is a person appointed to the company to wind it up and cause it to be dissolved.
The role of the Liquidator is to gather and realise the assets of the company in order to pay off the company’s Creditors in accordance with priority, and if surplus funds remain, to distribute them to the members, before dissolving the company.
There are three main options:
- Creditors Voluntary Liquidation
- Members Voluntary Liquidation
- Court Liquidation
The Creditors Liquidation
This is the most common type of Liquidation and is normally started by the company’s directors. There is a formal process to be followed which we will expertly guide you through. The first step is for the board meeting of the directors to be held where it is agreed that the company goes into Liquidation and notice to creditors and shareholders will be sent.
To call the Creditors meeting ten days notice must be given to all Creditors. The meeting must also be advertised in at least two daily newspapers with at least ten days notice.
Members Voluntary Liquidation
Sometimes a company has run its course or the directors may decide to retire. In those circumstances a Members Voluntary Liquidation is often the best and most tax efficient way of releasing any monies in the company.
Normally if monies are released as salaries they attract the marginal rate of interest. Funds released in a Members Voluntary Liquidation are taxed as a capital gain at 25%.
Again, there is a formal procedure to be followed which we can guide you expertly through.
A Court liquidation is commenced by order of the Court on foot of a petition. This is a formal legal process brought about when a Creditor asks the Court to wind up the company. It is sometimes referred to as a Compulsory Liquidation or an Official Liquidation.
The creditor or company must have grounds to present the petition and may therefore use the following:
- Where the company is unable to pay its debts.
- Where the Court believes it is ‘just and equitable to wind up the company’.
If your business is not being able to pay debts as they fall due, you need to seek legal advice immediately. Healy O’Connor Corporate Recovery will provide practical and solution driven advice to deal with the Liquidation of the company. Contact us on our Freephone number at 1800 54 54 54 or email firstname.lastname@example.org