fbpx

What is liquidation?

Jul 27, 2022

Liquidation is the process whereby the Official Receiver or an insolvency practitioner formally takes control of a company in order to realise and distribute its assets to its creditors to satisfy the debts owed. Following this realisation and distribution, the company will be dissolved.

A company can enter into liquidation in a variety of different ways:

  1. Compulsory liquidation – this is a court driven route where a relevant party (usually a company’s creditors or the company itself) applies to the court to order the company’s liquidation.
  2. Members’ voluntary liquidation – this is an out-of-court route where the shareholders of a solvent company resolve to place the company into liquidation and pay the company’s debts to its creditors in full.
  3. Creditors’ voluntary liquidation – this is an out-of-court route where the shareholders of a company resolve to place the company into liquidation and the directors cannot confirm the company’s solvency. Certain creditors of the company may be able to appoint administrators before the company is placed into creditors’ voluntary liquidation, but if this does not occur, the creditors are still entitled to choose the liquidator to be appointed and be regularly updated of the liquidation process.

What type of liquidation is appropriate for a company, and if liquidation is appropriate at all for a company, will depend on the particular circumstances of the situation. A variety of factors will need to be taken into account, including the cost of the relevant insolvency procedure and the company’s general solvency.

If you are looking to place a company into liquidation, advice should be sought from either a solicitor or an insolvency practitioner. Edward Beedham specialises in the legal and procedural aspects of corporate insolvency, including liquidations. If you require advice on corporate insolvency, please contact Edward Beedham at edward.beedham@herrington-carmichael.com or on 01276 686 222.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to your own particular matter before action is taken.

Edward Beedham

Edward Beedham

Solicitor, Corporate and Commercial
t:
 01276 854666
e: edward.beedham@herrington-carmichael.com

Latest Articles


 

PODCASTS

The Legal Room UK Podcast features a diverse range of specialists offering expertise on a variety of topics.
You can Subscribe on whatever podcast platform you use.

Top Legal Insights

 

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Commercial Lease: The Financial impact on Landlord and Tenant

Coronavirus (COVID-19) and the restrictions now in place to control its spread, are having a significant effect on many business sectors.

Divorce and Family Law

Divorce in Lockdown: Can I get some discreet legal advice?

We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how...

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Why is having a will so important?

It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

Award winning legal advice

We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2022 by Legal 500 and Alistair McArthur is ranked in Chambers 2021.

Camberley
Building 2  Watchmoor Park, Riverside Way, Camberley, Surrey  GU15 3YL
+44 (0)1276 686 222

Ascot (Appointment only)
102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY
+44 (0)1344 623388

London (Appointment only)
60 St Martins Lane, Covent Garden, London WC2N 4JS
+44 (0)203 326 0317

Wokingham (Appointment only)
4 The Courtyard, Denmark Street, Wokingham, Berkshire RG40 2AZ
+44 (0)118 977 4045

Email: info@herrington-carmichael.com

Our Services

Corporate Lawyers
Commercial Lawyers
Commercial Property Lawyers
Conveyancing Solicitors
Dispute Resolution Lawyers
Divorce & Family Lawyers
Employment Lawyers
Immigration Law Services
Private Wealth & Inheritance Lawyers
Startups & New Business Lawyers

© 2022 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael is authorised and regulated by the Solicitors Regulation Authority with registration number 446245.

Pay Online

Privacy Policy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies 
Client Feedback   |  Diversity Data