We are commonly asked whether an accountant is needed to liquidate a UK limited company. The answer is no, the process must rather be carried out by a licensed insolvency practitioner.
These are typically accountants who have gone on to receive specialist further training in winding up the affairs of insolvent companies.
- Company ceases trading
- Directors appoint an insolvency practitioner to undergo the liquidation process
- Once appointed, the directors powers to run the company cease
- Director assists the liquidator in preparing a Statement of Affairs document, which includes a detailed audit of company accounts, summarising what is owed and what returns may be presented to creditors
- Liquidator will have corporate assets independently valued prior to selling them at market value
- Proceeds of the asset sale will be distributed to creditors, in order of priority (unless this is a no asset liquidation)
- Any remaining funds are distributed to shareholders
- When the process is complete, the limited company is struck off the register at Companies House and ceases to exist
Organised Accounts Will Faciliate a Smooth Liquidation Process
Of course where a company accountant has kept the business records in meticulous order, accounting for all monies owed, it will make the liquidator’s job that much easier.
Once an Insolvency Practitioner is appointed he/she has very quickly to get up to speed with the often complex financial problems of the company, and compile a clear document outlining who is owed what, is the company due any money, what is the staff situation, and so forth.
If you feel your company is facing liquidation, try to gather all relevant documents, including recent bank statements, details of any finance agreements you’ve signed, deeds to company assets and so forth. The appointed IP will then be able to proceed efficiently to giving you the best possible solution.