What is a Compulsory Liquidation

 

 

 

Is your company struggling with HMRC arrears? Unpaid VAT, Corporation Tax, National Insurance, PAYE? If it is then you need to take advice as soon as possible. Communicating with HMRC is essential, and having a plan in place on how to deal with the debt is key. The more you bury your head in the sand, the more the pressure will increase, and over time, HMRC will begin to take a more aggressive approach in trying to recover those debts. So get in touch with the Real Business Rescue team to discuss your options as soon as possible.

What is a Compulsory Liquidation? The Compulsory Liquidation timeline commences when a creditor issues a winding up petition against the company. The petitioner must be owed more than £750 and have waited at least 21 days for their debt to have been paid. Once the winding up petition has been issued, seven days must have passed before it's advertised in the Gazette. After a further seven days, the winding up petition will be heard by the judge, who will then decide on the next steps. Once the court is satisfied that the company should be liquidated, they will issue a winding up order and the official receiver will be appointed. Upon being appointed, the official receiver will take over control of the company if the company hasn't already ceased trading. They will then begin to proceed with liquidating the company assets, which may include stock, vehicles, property or machinery. All proceeds from the sale of the assets, along with any cash held in the company bank account, will be ring fenced in order to repay the company debts as far as possible. Following the sale of the assets, the company will be officially shut down and its name removed from the Companies House register. Any debts which remain outstanding at this point will essentially be written off. Unless a personal guarantee has been provided. In this instance, the personal guarantee will crystallise and the individual will become personally liable for the debt secured this way. As always, feel free to contact the Real Business Rescue team a call to discuss your options.