What Happens After Liquidation?
If you’re closing down a company and are wondering what happens after liquidation then it’s important to understand that all companies must follow the same legal process. A company is liquidated because the business has come to a natural end with all debts paid, then directors and other employees will move onto new careers or simply retire. If a company has been liquidated because of insolvency, however, things can be a lot different.
The purpose of liquidation is to close a company without any liability being placed on the directors. If the right process has been followed and there is no suggestion of wrongful trading, that means they are free to move on – perhaps open another company or move to a new career.
What Happens Next?
- Following liquidation, assets from the company are sold and used to pay off creditors.
- Any employers will be faced with the fact that they now have to find new jobs elsewhere.
- Once the liquidation is complete, the company is removed from the register at Companies House and ceases to exist.
There are certain caveats that may well affect any directors involved in a company liquidation. For example, there may be personal guarantees in place that still need to be satisfied and honoured. The same could be true of if the directors have money owing to the company.
If you have opted to go through a voluntary liquidation, things may well be a lot easier and you will, in most circumstances, be able to set up a new company and start trading again by buying company assets from the liquidators.
One problem that directors are often closely focused on is what happens to their employees after liquidation and getting a specialist on board can help make this a smoother process.
It always helps to get the right information before you undertake liquidation.
You can contact our experienced team of experts for FREE today to find out more.