Voluntary Liquidation FAQs

Voluntary liquidation is not a subject that most people will know a great deal about. If it is something you are even considering looking into then it is vitally important that you have as much information as possible. The best way to get answers to your questions is by getting in touch with an organisation who are used to dealing with it. They will be able to give you all of the advice you need.

However, here are a few frequently asked questions to give you a basic idea of how it all works.

What is the best way of putting my company into voluntary liquidation?

An insolvency practitioner or a solicitor is the best person to speak to about this and it is strongly recommended that you make this your first port of call. There is also a relevant guidance booklet by Companies House called 'Liquidation & Insolvency (GP08)'. There is a wealth of information on insolvency and it gives details on many different topics including; corporate voluntary arrangement, receivership, liquidation and administration.

When I file with the Registrar do I need any forms?

Yes, you do. The forms you require are available from Companies House, free of charge. You will need Forms LQ01, LQ02 for dealing with the cessation or appointment of a receiver and Form 600 which covers the appointment of a liquidator in a voluntary liquidation. Law stationers can supply you with other insolvency forms (for a charge) and the Insolvency Service Website will also have similar documents.

What qualifications do the people in charge of these proceedings have?

The Insolvency Act was implemented on 29/12/86. Under this law they must be a fully qualified practitioner of insolvency. This applies to anyone who is acting as liquidator, administrator, administrative receiver or as a supervisor within a corporate voluntary arrangement and who is properly qualified. The only exemptions are those who hold the position of receiver manager/Law of Property Act receiver or anyone already in office before the implementation of the Act.

How is compulsory liquidation any different to voluntary liquidation?

When a company goes into compulsory liquidation, it begins with a court order and will be undertaken by a properly qualified practitioner or the Official Receiver. A voluntary liquidation is very different. It comes about by the decision of the company itself. It can be put into place either by the company's shareholders or its creditors.

If a company is 'insolvent' then it will go off the register after a certain time?

It is quite feasible for a company to be able to pay off its debts in an allotted period of time (no more than a year). If this is the case, then it will still be able to trade and stay on the live register. The company's directors will need to make a 'declaration of solvency' and come up with a realistic way of paying off debts. If this is attained by the company then it will effectively mean it is not in fact insolvent. This is how voluntary liquidation can sometimes be a wise move for a business.