What happens when a company goes into liquidation? Here are five simple steps
Step 1 - Find a Liquidator.
Step 2 - Pass details of any company assets over to the proposed liquidator, and valuers may get
these valued. This will independently set the value of the assets for going to auction, or you may
wish to buy them.
Step 3 – Tell the liquidator who money is owed to. The liquidator will write to them all to let
them know what’s happening and tell them that a creditors meeting will be held. This will quickly
remove creditor pressure and creditors will talk to the liquidator instead.
Step 4 – hand over all company information and books and records. The liquidator will use this to prepare a report to the creditors
Step 5 – A company director needs to "chair the meeting of creditors". In actual fact the liquidator will
run the meeting but you or one of the directors must attend it by law. The meeting of creditors is
usually a simple short meeting with no one attending.
Is that it?
Well, as far as the directors of the company are concerned, yes. But the liquidator's job is not done. They will need to collect in all the cash and actually "liquidate" the assets. This means that stock will need to be sold, debts chased up, books and records stored and money distributed. This all tends to happen after the creditors meeting.
If you are interested in purchasing some of the assets of a liquidated company you can go to the auctions or approach surveyors who work with IPs. We have a page on our website that lists companies that have gone into liquidation but you will need to subscribe to the provider to get the actual name of the company or the IP handling