He has approached me to ask whether he would be able to dissolve the company and write off the debts (including the corporation tax due for the year ended and the VAT).
He would then look to start up a new limited company and commence trading as before with the slate wiped clean.
If you’re the director of a limited liability company that goes into liquidation, you face little risk – provided that you’ve acted properly and in good time – but there are a number of consequences that you need to be aware of.
When a liquidator is appointed, most of your powers as a director will cease.
The purposes of a liquidation are: Just distribution of assets When a company is being wound up, the company’s business ceases to operate and its assets and affairs are handed over to an independent liquidator whose powers, duties and functions are regulated by the Companies Act (Cap 50).
The rights of unsecured creditors over the company's assets are virtually "frozen" upon the commencement of the liquidation to avoid a further deterioration of the company's financial position and proliferation of its liabilities.
The most common times when a company director would benefit from speaking to a Liquidator (i.e.
an Insolvency Practitioner) is when they are looking to: and they want to close down their company and take their money out in the most cost-effective way.
Upon the completion of the liquidation, the company goes into dissolution and it ceases to exist.The liquidation commences at the time of passing the resolution.It is adopted where the company is able to pay its debts in full within 12 months after the commencement of winding up.He is not trying to dodge paying his dues (he has always paid corporation tax and VAT for his business and personal tax where applicable), he simply cannot pay his debts.Overview Liquidation is a process where the company’s assets are seized and realised, with the resulting proceeds used to pay off its debts and liabilities.