Benefits of placing a company into liquidation over Christmas
The Christmas holiday period can be the ideal time to place your company into liquidation. A creditors voluntary liquidation process needs a period of closure between starting the process and the shareholders and creditors meeting.
The period of closure is normally around 2 weeks, which is the period of notice that must be given to shareholders when convening a general meeting to pass the resolution to place the company into voluntary liquidation. The reason the company should cease trading is because when a director has decided to convene the meetings he has acknowledged the company is insolvent and it cannot continue, therefore carrying on to trade is unlikely to be done so without incurring more losses or debts that won’t be paid, which is a breach of a director’s fiduciary duty and can therefore lead to personal liability.
For a director that is looking to phoenix his/her company, a 2 week closure can often be a barrier that may force him/her to consider a pre-pack administration, however if the company is going to be closed over the Christmas holiday period the 2 week period of shut down is achieved without causing any damage to the company’s customers or future prospects.
Whether you want to enter into voluntary liquidation or want to obtain more information on the possibility of placing your company into liquidation, why not contact us immediately, we will help you achieve your objectives and maximise your outcome whilst protecting you from personal liability.