Liquidations are common with 1000s every year. It is just an unfortunate fact that some businesses cannot make money and have to close down owing money to creditors. It is a very stressful time for directors, seeing their business collapse, having creditors on their back and chasing for payments which they cannot afford and then on top of this, having to pay out for liquidation…but is it really necessary to pay for this?
If the company has only small debts say a £2000-£5000 but with no one creditor being owed more than £2000 then it might be possible to simply dissolve the business. We have a pack that has all the relevant forms, guides and letter templates for just £40 + VAT. See our dedicated page for details www.dissolvemycompany.co.uk
There are two types of liquidation
Of course, you can just choose the cheaper liquidation firms, so long that they are licensed! But, save all of that time searching around…Little do many know that there is a shine of light and a way for you to liquidate your company for FREE.
Following liquidation, directors have statutory entitlements, alike all employees. Directors are entitled to redundancy pay, using this pay out to fund your companies liquidation makes free liquidation possible.
To be eligible for redundancy pay-outs as a director you must see the following statements as true:
- Your company has traded in the last 12 months
- Your company is currently insolvent or was at the time of liquidation
- Your company has been incorporated for at least two years
- You are paid via PAYE or have been previously
- You must be regarded as an employee in the company as well as a director i.e. work a minimum of 16 hours per work, have a practical role rather than just advisory and have a written/oral/implied contract
- You do not owe the company any money via loans.
Some useful information relating to claiming redundancy pay as a director of an insolvent company:
- The amount of redundancy pay you are entitled to will depend on the length of service to the company, your age and your pay rate.
- Under 22 years = half a weeks pay for each full year of service
- Between 22 years and 40 years of age = one weeks pay per each full year of service
- Aged 41 and above = one and a half weeks pay for each full year of service
- There is a cap on the amount of weekly wages of you as an employee (at £538) and the length of service held (capped at 20 years). The maximum amount for statutory redundancy pay is capped at £14,670.
- It is advisable to claim with the Redundancy Payments Service within six months of the liquidation date. The longer you leave it to claim, the harder it will be.
- When claims are accepted, they are paid from the National Insurance Fund.
- Once the professional fees have been covered relating to the liquidation process, if there are any redundancy funds remaining, it can even be used to cover any debts outstanding.
- Directors cannot claim redundancy when in a solvent liquidation as this is ultimately wrong – you are actively choosing to put yourself out of work.
Contact us today to check your eligibility and for us to advise you on the best way forward – This professional expert advice is also FREE!
After any meeting we issue a FREE 30-page solutions reports so you can understand your options