p>In certain circumstances Liquidation is the only solution in dealing with the financial issues faces by the insolvent business. However Liquidation does come at a cost and depending on the complexity of the case this can be from £2,500 upwards.
These costs can be absorbed by any funds available in the company or from proceeds realised following the sale of any assets. If these funds are not sufficient to meet the Liquidation costs then the directors themselves will be required to make up the shortfall.
Not all liquidation services are the same
Liquidation can be a complex process and it is important to appoint an insolvency practitioner who is able to deal with the unique circumstances you face. As a result cost should not necessarily be the determining factor as cheaper alternatives may not ultimately be the best solution.
It is important to establish and understand the level of service that will be delivered. Don’t assume that you will get additional help and support you may need such as setting up a new business as there may be additional costs associated with such advice.
As with most business processes, the more you can do yourself the more you can save. Liquidators charge by the hour so you may wish to undertake certain aspects to minimise costs, especially if they are likely to be borne by the directors.
Things you can do to minimise the cost of liquidation include:
- Winding down operations
- Closing the business
- Selling off stock and assets at market value
- Sell your business premises or give notice on outstanding lease
- Deal with staff redundancies
- Try to resolve legal issues
- Finalise your accounts and prepare for liquidation
- Sort out tax issues with HMRC
Getting professional advice and good service is as important when placing your business into liquidation as it was when you commenced trading.
Make sure you are getting value and service by appointing the right liquidator.