If your company is either going through or has been liquidated, it can be a deeply worrying time. There are countless myths that surround liquidation, and so we’ve put together this guide to cut through the nonsense and tell you what comes after your company has been liquidated.
Put simply, company liquidation is a effectively the closure of a company so that its assets can be redistributed to settle outstanding debts and pay off creditors. Liquidation comes in many different shapes and forms – you may hear terms like receivership, dissolution, insolvency or administration bandied around – but all are moves to eventually wind a company up or, in rare cases, rescue it from complete collapse. Company liquidation might be a voluntary move if you decide that your business cannot pay its debts, and the help of an agent of practitioner offering insolvency advice might be needed. On the other hand, company liquidation might be forced. Compulsory liquidation will be initiated by your creditors as they demand repayment and apply to the courts.
Regardless of how your company gets into the liquidation process, whether is self initiated or forced, it can be a stressful period for all involved. Business owners might blame themselves for the ‘failure’ of their business and find it difficult to move forward. There is life after liquidation, though.
Life after Company Liquidation
Before liquidation hits, or you make the decision to liquidate your company, it’s important to prepare for the future and the emotional impact it’s going to have. You’ll need to fully comply with the liquidation process and doing so will make it easier to move on and make new plans – liquidation in no way means that you can’t give your business another shot or start a new business.
Many business professionals will consider setting up a successor company after the liquidation of an old one. A successor company is usually a limited company which will shield the business from any personal debts which might otherwise impact its chances of success. It’s advisable for most managers to seek some professional advice in this instance, as reallocating employees, setting up new bank accounts and registering a new company can in some cases be a legal minefield. There are many experts offering insolvency advice and there are even liquidation practitioners who will help guide you through the process from start to finish.
One of the most important things to note about company liquidation is that it is not the end. The liquidation or insolvency process can discourage many business owners from pursuing their goals and achieving their life’s ambitions – business is an ever changing game and liquidation is sometimes a lesson to be learned, particularly if it’s a particularly daring or niche business. So learn from the company liquidation process, and don’t let it hold you back in any future endeavours.