Liquidating a company in Scotland comes with a few distinct differences to the process south of the border.

If you’re a company director considering liquidation for either your insolvent or solvent limited company, read for our complete guide.

Liquidating a Scottish Company That’s Insolvent

For directors facing liquidation, there are two options for your insolvent company.

Voluntary Liquidation (also known as Creditors Voluntary Liquidation (CVL) – This is when you opt to instruct an insolvency practitioner yourself, rather than waiting to be forced into a compulsory procedure by the court. It allows for more directorial control than a compulsory winding up.

Compulsory Liquidation – Creditor pressure, often from HMRC, results in a Winding up Order, which is a High Court ruling which forces your company to close immediately. In this situation, you will not have any say over while insolvency practitioners is appointed, nor the timing.

What’s the Process of Liquidating a Company?

  1. If choosing voluntary liquidation, the directors will meet to vote upon the resolution to wind up the company. 75% of shareholders must agree.
  2. A liquidator (insolvency practitioner) is appointed and directors’ powers cease.
  3. Creditors are informed of the situation and an advertisement is placed in the Edinburgh Gazette, the official journal of public record.
  4. Liquidator will prepare a Statement of Affairs document, with the help of directors, outlining the financial situation.
  5. Liquidator sells any company assets to repay creditors in order of preference
  6. Liquidator will conduct a directorial investigation as part of their legal mandate to check of potential misfeasance such as wrongful tradking
  7. At the end of this process, the company is struck off the register at Companies House and ceases to exist

Liquidating a Solvent Scottish Company

Where a solvent company has assets, a process known as Members Voluntary Liquidation is the correct way to close it down.

Directors may be approaching retirement or simply onto new ventures and wish to close their company down, sell the assets, and distribute the proceeeds amongst shareholders.


  • Directors sign a Declaration of Solvency
  • Insolvency Practitioner is appointed
  • 75% of Shareholders must vote upon the Resolution to Wind up
  • MVL is advertised in the Gazette
  • Assets are independently valued and sold
  • Proceeds distributed to shareholders
  • Company is struck off the Register via Companies House

Court Liquidation

What is termed compulsory liquidation in England and Wales is known as Court Liquidation in Scotland.

This is where a creditor, tired of not being paid, petitions a judge to rule upon a company’s non-payment. Where the judge finds against the debtor company he/she rules a Winding up Order which puts the company in to immediate liquidation.

In Scotland Winding up Petition cases are heard at local sheriff courts unless the case has particular importance in which case it is dealt with by the Scottish Court of Session.


After the Winding up Order is granted, the Court will immediately appoint an insolvency practitioner as interim liquidator.

  • Directors powers cease
  • Liquidator will prepare a Statement of Affairs
  • Liquidator will arrange an independent valuation of corporate assets, then sell them and distribute proceeds to creditors in order of priority
  • Company will be removed from the the Registrar of Companies for Scotland

Putting a Business into Liquidation in Scotland

If you’re a director concerned about what will happen if you decide to liquidate your company, here is the way it works

  1. Make contact with a licensed insolvency practitioner. NB: you cannot liquidate a company yourself, the law requires working with a regulated professional such as ourselves.
  2. If liquidation is decided upon as the appropriate process, the Insolvency Practitioner will take over all dealings with creditors after being officially appointed
  3. As directors your duties will come to and end, employees will be made redundant, premised will close and the business will cease trading
  4. Liquidator will sell assets and repay creditors in order of preference
  5. Banks accounts will be closed, and the company struck off the register meaning it no longer exists
  6. Directors are free to seek additional employment or start another limited company, assuming statutory regulations are following around Phoenixing

Edinburgh Gazette Insolvency Notices

To see all insolvency notices for Scotland, you can see the digital version of the Edinburgh Gazette, the Official Journal of Public Record, here.

Any insolvency within Scotland must be advertised here.