Liquidating a company is something that no business owner or director wants to have to deal with. In some cases, however, it can become an inevitability; in those situations, you’ll likely want it all to be done and dusted within as small a time frame as possible.
While there’s no single amount of time that it will take to liquidate a company, you can generally make a very rough estimate. This guide aims to do just that, taking you through some of the main factors that will impact the duration of the liquidation in question.
A rough estimate
In most cases, liquidating a company will take somewhere between three months and two years. As you can see, this is a pretty big range – how long it actually ends up taking will depend on a wide range of variables. There are a number of things that can increase or decrease the complexity of the process, a few of which we go through below.
Steps in the liquidation process
There are a number of different steps that you’ll need to follow in the process of liquidating your company.
Deciding on a liquidation option
The first step to liquidating your company will be deciding on the kind of liquidation process that you use. There are two main types – voluntary and compulsory. In a compulsory liquidation, you’ll be forced into it by your creditors, while a voluntary liquidation will be initiated by choice.
During this stage, the creditors, directors and shareholders might need to come together and vote on a series of motions.
Appointment of a liquidator
Once an insolvency process has been chosen, a liquidator can be appointed from somewhere like Chamberlain & Co. They will be responsible for guiding the company through the liquidation, ensuring that assets are sold and distributed according to the legal order of priority.
The liquidation itself
While choosing a liquidation process and appointing a liquidator can be a relatively quick process, the actual liquidation itself can take quite a lot longer. This will depend on the size of the company, the kinds of assets and how difficult they are to sell, and how thorough an investigation they need to carry out.
It could take anywhere from a few months to a few years. The company and the conduct of the directors will need to be thoroughly investigated, so that the liquidator can write up a report for the creditors. If the insolvency practitioner has to investigate for wrongful trading, this can extend the process further. There are countless other issues that can pop up and delay the process, making it difficult to predict with much accuracy how long everything will take. By ensuring that you have all of your documents together in a clear and ordered manner, and by maintaining good relations with your creditors and other shareholders, you can help to ensure that things go as smoothly as possible, allowing you to get out of the messy situation as quickly as you can.
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