Solvent liquidation – the option you may not have considered

Sell your company or close it down? The first isn’t always the best option.

You may be considering whether it’s time to retire to enjoy the fruits of your business. Or you might want to release capital from your current business to fund a new venture. Perhaps your initial intuition is that the best way to release the money in your company is to sell it. Is selling a company always the most appropriate way to release capital? Is selling a company always the most efficient way of doing this?

When selling a limited company there are several potentially tricky things that need to be given careful consideration, including:

  • How to market the company effectively ensuring that it is exposed to the widest audience of potential buyers;
  • Whether there is a need to continue trading the business while marketing it in order to preserve the value for potential purchasers;
  • The costs of marketing and selling the company;
  • Preparation of documentation to enable potential purchasers to carry out their due diligence;
  • What obligations in terms of taxation could arise from the sale of the company?

What is solvent liquidation?

There is an alternative to selling your company. An appropriate option for you and your company could be a solvent liquidation, also known as a members’ voluntary liquidation. If you own and run your limited company this process might be the most efficient way of winding down the business and releasing the company’s capital.

Don’t be put off by the stigma that sometimes accompanies the word ‘liquidation’. A solvent liquidation is simply a statutory process that allows the shareholders of a successful, profitable company to wind it down and release its capital. It is a formal, legally recognised process for closing a company carried out for the shareholder by an insolvency practitioner.

Shareholders are in control of a solvent liquidation and they choose the insolvency practitioner who will act as Liquidator of the company. The Liquidator will take the company through the liquidation process, ensuring that all the company’s affairs are in order to provide the shareholders with peace of mind, remit the company’s capital to the shareholders, and then take steps to formally dissolve the company.

How can FD Business Rescue help with a solvent liquidation?

Our insolvency practitioners have advised and assisted a wide range of businesses where a solvent liquidation was the best option. Such as companies run by entrepreneurs, small businesses, tradespeople, medical professionals, group companies, and multinational corporations. We can help you decide if a solvent liquidation is an appropriate method of releasing your company’s capital. We will also explain the steps required to put your company into a solvent liquidation.

Get in touch

If you would like to know more about solvent liquidations or discuss whether a solvent liquidation could be appropriate for your company, contact FD Business Rescue’s manager Steven Rodden at s.rodden@frenchduncan.co.uk or on 07986 519 592. Steven specialises in solvent liquidations and optimised wind down strategies for limited companies. He can put you in touch with one of our insolvency practitioners following a free, no-obligation initial assessment.

Please get in touch with one of our team if you require any other expert advice on saving a struggling business.

Man calculating graphs
5 ways to rescue your business

If you require help, get in touch or download our FREE guide with some top-tips you may not have considered.

Around4 Ltd

From his first discussions with our team, the director was put at ease, opting for a Creditors’ Voluntary Liquidation. After

Read More >
Download our free guide to see 5 ways to rescue your business that you didn't realise were an option

If you require help, get in touch or download our FREE guide with some top-tips you may not have considered.