Frequently Asked Questions
Understanding Liquidation
What is liquidation?
Liquidation is the legal process of closing a company that can’t pay its debts. A liquidator is appointed to sell assets, pay creditors, and deregister the company.
What’s the difference between voluntary and court liquidation?
Voluntary liquidation is initiated by the directors or shareholders. Court liquidation happens when a creditor applies to wind up the business through legal action.
What happens to company debts?
The liquidator handles all creditor claims. Debts are paid based on legal priority. Anything remaining is written off once the company is closed.
Can I be personally liable for company debts?
Not usually, but if you’ve signed personal guarantees or traded while insolvent, you could be at risk. We’ll assess that with you.
What is a statutory demand?
A formal legal notice from a creditor. You have 15 working days to respond or risk court action. Contact us immediately if you’ve received one.
Can I still start another company?
Yes. In most cases, directors can start another business unless banned. We’ll advise you on how to do this cleanly and legally.
Your Options & the Process
Is liquidation my only option?
Not always. You may be eligible for restructuring, voluntary administration, or creditor negotiation. We’ll walk you through your choices.
How long does liquidation take?
Most liquidations take 6 to 12 months. Some wrap up faster depending on asset recovery and creditor claims.
Can I appoint my own liquidator?
Yes but if a creditor applies first, you have 10 working days to act. After that, the court decides who’s appointed.
What does a liquidator actually do?
We take over management of the company, sell assets, handle creditors, and report to the Companies Office so you don’t have to.
What happens to my staff?
Employees are released once liquidation begins. We calculate final pay and ensure they can claim any unpaid wages as priority creditors.
Do I have to face creditors directly?
No. From day one, we deal with all creditor communication on your behalf, professionally and legally.
Director Support & What Comes Next
Will this affect my personal credit?
No, unless you’ve signed personal guarantees. Company liquidation affects the company’s credit record, not yours.
Do I have to attend court?
Not in voluntary liquidation. In compulsory liquidation, you may be called on to provide information but are not automatically required to attend court.
How do I get started?
Just contact us. We offer a free, confidential consultation to assess your situation and recommend your next step.
The Most Common Question... Will I go bankrupt if my company is liquidated?
- No. Company liquidation is not the same as personal bankruptcy. If your business is a limited company, the debts belong to the company, not you personally.
- You might only be at personal risk if:
- You’ve signed personal guarantees
- You’ve traded while insolvent
- You’ve committed serious breaches of director duties
- We assess all of this with you — up front — and work to minimize any exposure. Most directors we work with do not go bankrupt.