Sometimes, when things aren’t going as planned for your business, it’s best to voluntarily liquidate. Under Voluntary liquidation, the decision to dissolve emanates from the company’s shareholders — not the court, which is the case for an involuntary liquidation.
One of the primary reasons why companies voluntarily liquidate is because of suffering too much losses, to the point that the business becomes incapable of paying off debt. But besides poor business conditions, this liquidation option is also undertaken by an organization wherein the very founder or a key executive has decided to leave. Special purpose entities who have, well, already served their purpose, also typically dissolve through this liquidation process.
Now, if you’re wondering, “What would I gain if I decide to voluntarily liquidate my company?, it’s fortunate that you’ve actually got a handful of advantages. Here are seven of them.
You will be more in control. You and your company directors will have a better say about how the liquidation process will transpire. You yourselves will also have the opportunity to appoint the liquidator of your choice.
Your debts will be written off and your lease will be voided. After a voluntary liquidation is completed, the remaining liabilities of your company will be written off. Also, outstanding lease payments will also be voided. Most importantly, you’d prevent using personal assets to pay off your debts.
Your insolvency practitioner will be the one to talk to your creditors. Speaking of credits — another benefit of going through this type of liquidation is having your insolvency practitioner as your proxy when meeting with your business’ creditors. Many business owners and directors deem this as a great way to reduce their stress levels.
Your employees can claim redundancy pay. Your liquidator will also be responsible for making your staff members redundant. Those who are eligible will get the chance to claim their so-called redundancy pay. The funds will primarily be sourced from the sale of your business; but if it’s not enough, employees can claim this pay via the National Insurance Funds.
You will incur less administrative costs. Though liquidation costs vary from business to business, they are generally lower compared to when you undergo an involuntary liquidation. You can also avoid the intricate process of court investigations — which are carried out to ensure that the liquidation has been completed with utmost legal compliance.
You will have a graceful exit and a fresh start. By voluntarily liquidating your business, you will be able to close your company in the most graceful manner possible. Because your reputation is protected, you can also get a fresh start should you plan to put up a business sometime in the future.
Have you ever asked yourself, “Who do I turn to if I am to voluntarily liquidate my company?” The answer you’re looking for can be found at Bridge Newland. Backed by years of experience, their experts can help any business of any size and sector get the best benefits of voluntary liquidation. Learn more about their services at https://www.bridgenewland.co.uk/voluntary-liquidation or call them at 0800 612 619. You may also reach out to them via email at firstname.lastname@example.org.