There are many ways to close a company and the route chosen is entirely dependent on the circumstances.
An insolvent company is one which is unable to continuously meet its outgoings when they fall due or where its liabilities exceed its assets. Directors of companies have legal obligations, including ensuring that creditors’ interests are protected. Once a director becomes aware of a company being insolvent, they are obliged to address the issues. If they do not deal with these issues appropriately, directors risk being liable for “wrongful trading” and can be fined and disqualified from acting as director.
In some cases, insolvent companies may need to go down the route of a formal liquidation. This could be in the form of: -
A solvent company is one which can continue to meet its debts when they fall due and where its assets exceed its liabilities.
An insolvency process doesn’t always happen because a business is in financial trouble. For example, where a company reaches the end of its’ life, or the directors want to retire from the business, an insolvency process is often used. In these sorts of cases, there are a couple of options: -
For further options, please also see our Restructuring services