Directors Liquidation

Thinking of a Directors Liquidation? What Are The Options?

The term directors’ liquidation is one which describes the formal process by which either a partnership of a limited company is wound up by either the courts or a meeting of creditors. It is also called a business liquidation. We have expertise in organising business liquidations, although as a rule we try as hard as possible to avoid a liquidation if there is a business that can be saved.

For a partnership, a directors’ liquidation will be the last resort, due to the adverse consequences such an action has on the individual circumstances of the partners. Because a partner is jointly and severally liable for the losses of a partnership, a liquidation will mean that the partners of the business are liable for its losses. Therefore it is imperative that early intervention takes place when a partnership faces potential losses. If remedial action can be taken as soon as a problem is discovered in a partnership, it may be possible to avoid liquidation and instead put in place an administration which would ringfence the business and protect it from creditors taking action, whilst rescue solutions are put together.

If done soon enough it can lead to Partnership Voluntary Arrangements, which will provide a structured mechanism for creditors to get paid some or all of their debt over a period of time.

There are similar exits for a company, and again early intervention is encouraged. If a company has to go into liquidation, there are not the same personal risks as for a partnership as the limited company shell protects the directors from personal liability, unless there has been wrongful or fraudulent trading.

We always encourage those seeking advice to speak to us as soon as they encounter a problem, even if that results in us telling them that there is not immediate concern. Directors’ liquidation will be a fact of commercial life for the next three years or so, but it rarely spells the end of trading as something can usually be done to re-start a trading operation.

If you would like to talk about directors' liquidation to a specialist with 17 years corporate insolvency experience then enter your details into the web form below for a no-obligation chat.

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We specialise in the following:

business debt factoring
invoice discounting
business bankruptcy
business finance
company bankruptcy
voluntary arrangement

pre pack administration

voluntary liquidation
business liquidation
wrongful trading
business insolvency
business rescue
business turnaround

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