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Satisfying Debts through Liquidation

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During the winding up process just prior to the dissolution of a company all assets are realised (sold) in order to satisfy outstanding debts. The process of realising assets is known as liquidation. UK liquidation laws are very specific in terms of who oversees the process and how it is handled. In compulsory liquidations this is handled by a trustee or liquidator that is court appointed. In voluntary liquidation (whether creditors 'or members') it is handled by an administrator, trustee or liquidator who is chosen by either the members or the creditors depending on which type of voluntary liquidation is in process. Most often the liquidator will list items for sale with liquidation companies that auction or sell the assets. Profits made from the sale are then used to pay taxes, creditors and any other entities, including employees, that are due payment.

During liquidation, UK trustees and liquidators must follow strict guidelines pertaining to the sale of those assets as well as how revenue is handled. Most often liquidators have certain liquidation companies UK based that handle the bulk of their sales for them. In establishing a rapport with a liquidation company the trustee is able to handle matters expediently so that the winding up process can be completed within the timeframe regulated by law. Whether your company is seeking liquidation advice as part of a voluntary liquidation procedure or are seeking liquidation help to better understand what this means to you, information is available on the R3 website. You could also ask a professional Insolvency Practitioner to explain the liquidation process to you so that you have a better understanding of just what to expect. However, the one thing we all understand is that liquidation means that any assets we once had will have been sold to pay off outstanding debts.

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