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Cheapest Way To Liquidate a Company

Written by Keith Steven Managing Director 24 June 2022

cheap £1 coin

A Cheap Liquidation...Is this an option?

Liquidating a company is a complex process subject to the law and various rules and regulations. Consequently, it is not something that can be done cheaply. If you cannot afford a liquidation and need a more cost effective procedure, there are options!

Legally...CHEAP Liquidations

  • You can self fund your liquidation by selling the company assets. The proceeds will then be used to pay off creditors and Insolvency Practitioners,   This allows the liquidation to be done cheaply.
  • Insolvent company directors receive redundancy payments from HMRC - this can help fund the liquidation so it is cheaper overall.
  • Allow a creditor to force the company into a compulsory liquidation.  This is the cheapest option in that it doesn't actualy cost you anything.  BUT it takes a long time and can be stressful.  In addition, the court appointed liquidator is more likely to pursue you for debts you owe to the company due to the simple fact they are not restricted by how much money is in the case.
  • If you have no assets to liquidate, you can simply dissolve the company by striking off the companies register as long as it does not owe any significant monies to creditors.


The insolvency industry does sometimes get bad press, mainly because there are some unscrupulous advisors out there who purport to help business people in a vulnerable position, when all they want to do is rip you off!

The most common scams occur in the debt management market. For instance, people are persuaded to hand over large amounts of cash to their "advisors" who will negotiate on their behalf with creditors for a fee.

Another common one is the "insolvency specialist", offering to liquidate or pre pack your business very cheaply. All they are doing is taking a fee to then refer you to an actual Licensed Insolvency Practitioner who will liquidate your company for an additional fee. ONLY a licensed insolvency practitioner can put the company into voluntary liquidation AFTER creditors have appointed him or her. Also, disbursements may not be included in the quote that could be in excess of £1000. Some companies will say they liaise with creditors but all they do is send a letter out and that is it and will not answer any calls. So they will end up calling you instead. Best get a proper professional IP to do the job properly. This will save you time, worry and stress.

Typical dubious practices

Court Liquidation

Another dubious process in England & Wales is the practice of effectively taking money from you to then wind up your company through the court. This is sometimes known as a directors petition. Some courts may allow this if the directors are also creditors. Other courts will reject this procedure as an abuse of court process.

Dissolution promises

Advising you that you can dissolve the company when it has lots of debts BUT not pointing out that creditors can object. HMRC will typically reject dissolution even if only a few thousands pounds of tax debts exist.

Saying that directors redundancy will settle the costs

It is possible that directors will receive redundancy in a liquidation but only if they have an employment contract and have paid themselves via PAYE, AND they do not owe the company any money.  This situation is very rare in our experience!

Forcing you down a particular insolvency route.

Pre pack administration appears the most attractive to directors, as some think that they can buy back the assets on the cheap and shed their debts quickly and easily - according to advertisments anyway! It is not a quick process, but it is a powerful rescue tool in the correct circumstances. For instance, some banks will not allow a pre pack sale to a company that is owned by the directors of the previous firm. Also the value of the assets has to be assessed by an independent valuer, normally a Chartered Surveyor who is regulated by the RICS. It is against the law to sell assets from an insolvent company at an undervalue. Basically, if the advisors have not at least talked to you about a CVA then they have not given you all the options and the advice is flawed.

So how do I protect myself and ensure that I am getting good advice?

First and foremost you must ensure that the firm you are dealing are Licensed Insolvency Practitioners. You can call yourself an "insolvency specialist" and not be regulated in any way. The regulators are the following:

  1. Insolvency Practitioners Association 
  2. Institute of Chartered Accountants in England & Wales 
  3. Institute of Chartered Accountants in Ireland 
  4. Institute of Chartered Accountants of Scotland 
  5. The Law Society 
  6. Law Society of Northern Ireland 
  7. Law Society of Scotland 
  8. Association of Chartered Certified Accountants

As a "competent authority" under the Insolvency Act 1986, the Secretary of State for Business, Enterprise and Regulatory Reform (BERR) - and, for Northern Ireland, the Department of Enterprise, Trade and Investment - also authorises IPs.

Note that you can still be a member of the Institute of Chartered accountants and not actually be licensed to be an insolvency practitioner.

The next step is to ensure the company has a good track record. Perhaps look them up on companies house, look for testimonials or case studies and perhaps ask if they can provide references. A very short about us page or who we are page should arouse your suspicion. Especially, if it does not have details on actual people, just phone numbers and email address.

Also remember that business to business selling is not governed by the same strength of regulation as business to consumer selling. There is no Business Protection Act just a Consumer Protection Act 1987. If you sign a contract then you are unlikely to be able to get out of it easily. There is no "cooling off period" no "distance selling rights" etc to protect you as is the case if you were a member of the public. It is very much if you are a business then you need to do your own research and caveat emptor (buyer beware).

So, if you want to liquidate your company cheaply then you should visit our dedicated liquidation site at  We can provide an estimate within the hour.

Categories: Liquidation, What is Creditors' Voluntary Liquidation CVL

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