You Can Now Liquidate a Limited Company Online – Get Started Today

From July 2017, The Small Business, Enterprise and Employment Act 2015 changed insolvency rules; this means that you can now start the liquidation of a company online.

Over the last 31 years, The Insolvency Act 1986 has undertaken 28 different amendments, each of which changed the ways in which struggling companies are required to deal with matters.

Here’s what you need to know about the new changes and online liquidation

There have been updates

• The recent updates show the government’s recognition for the need to modernise and streamline insolvency practices
• Ultimately, the goal of any insolvency legislation is to put company creditors into a better position
• The recent update will achieve this by reducing liquidators’ costs, in turn increasing creditor disbursements
• Until now, the process has been delayed due to out-dated requirements

How does The Small Business, Enterprise and Employment Act 2015 affect directors’ experiences of insolvency?

Communication streamlined

Modern means of communication between liquidators and all other parties are now used as a default method.

The liquidation process is therefore naturally accelerated, especially because information needed by the liquidator can be sent as email attachments, rather than via ‘snail mail’.

Standard methods now include virtual meetings, downloadable links, electronic voting and email.

It is clear, when comparing these methods to posting information and waiting for creditors to reply to arrange a physical meeting, that the process can now be completed much more rapidly and you can essentially liquidate a company online.

‘Deemed consent’

The way in which decisions are made has also been changed dramatically; rather than waiting for each creditor to respond, liquidators are now able to give them a time frame in which to object to the proposed action.

Thus, the standard practice is now to assume that the majority of creditors have agreed to the proposition, as long as no more than 10% of creditors have responded with an objection (apart from those in connection with setting the office-holder’s remuneration).

No more face-to-face creditors meetings

Another substantial cost-saver is the removal of the requirement for creditors and their representatives to travel all over the country to meet in person. Of course, in the past these meetings were usually attended by only a few creditors at the most.

From July 2017, it is no longer an requirement for an initial creditors meeting to take place (this meeting is also called a Section 98 meeting).

Unless the gathering is requested by a certain proportion of the creditors, the liquidation process can go ahead without having to go over this hurdle (and the subsequent delay).

Emails can also now be utilised to send information to creditors, and a final creditors meeting is also no longer required.

Therefore, directors will benefit from the decision-making process becoming much faster under the novel ‘deemed consent’ rule, along with the modern communication methods having replaced the postal system.

How can we help you liquidate a company online?

Initially, we are able to assess your company and whether or not it is actually suitable for liquidation, free of charge. This is all done through an online system you can start the online liquidation here.

We would take into consideration the effects on yourself and your fellow directors; this is important for us to broach early on, because personal liability is risked if directors are found to have acted wrongfully, or if they have personally guaranteed any of the outstanding amounts.

Investigations into director conduct are sometimes required following liquidation, which is obviously not always a comfortable experience.

We would ensure that any issues are broached before they arise, and help you to decide on the best path to take based on your personal circumstances.

If liquidation is deemed to be the most appropriate option for you, one of our panel of Insolvency Practitioners (IPs) will be happy to deal with the matter for you.

We would also ensure that if any redundancy is entitled, you can claim this, and even use this amount towards instructing an IP rather than paying up-front.

Next steps

If you are unsure where to turn, one of our friendly team will be happy to talk through your options with you, free of charge. Just give us a call for free on 0800 975 0380.

You can also start your liquidation online