Does Liquidation Mean Going Out Of Business?

November 30, 2018 / FAQs

A common question we get asked by business owners who are having financial problems is whether liquidation automatically spells the end of their company.

There are two ways a company can go into liquidation – voluntarily or involuntarily – both of which mean that your company will be closed down and no longer be in business.

Involuntary liquidation

When a company goes into involuntary (compulsory) liquidation, this means the process is being forced upon them by the company’s creditors (often HMRC).

A winding up petition will be lodged with the court so that any outstanding debts can be recovered and the creditors paid.

If any of the following criteria sounds familiar for your company, you need to address the situation before anyone tries to force you into compulsory liquidation:

  • The total debts and liabilities exceed the value of your assets
  • You’re unable to pay debts as and when they’re due
  • You’ve failed to pay your taxes
  • Your company has failed to re-register as a public or private company

Once the compulsory liquidation process is underway, the sale of the company’s assets will begin – and any control of the situation will be taken out of your hands.

Voluntary liquidation

With a voluntary liquidation, you will have more control over the situation and your business reputation will remain intact – as you are being pro-active in dealing with the problems.

You will need to appoint a Licensed Insolvency Practitioner (like Clarke Bell) who will be able to guide you through the whole process. Having assessed your circumstances, we will tell you what your best option is. (That advice is free.)

If a voluntary liquidation is the right option for your company, you will be supported throughout the process – which is known as a Creditors’ Voluntary Liquidation (CVL).

More than 10,000 companies typically go into a CVL each year – because it is the best option for the directors of the company and creditors.

Whilst putting your company into CVL does mean your company has closed down, you still have the opportunity to re-start a business having learnt from your previous experiences. Indeed, many of the most successful directors have a failed business behind them – but have learnt from it and gone from strength to strength.

Clarke Bell’s fees for a CVL are affordable – from just £2,995 (all inclusive).

We can help you deal with your company’s cash flow problems. If it is the best option, we will put your company into CVL and provide support for you if you want to re-start the business (including introducing you to funders who specialise in business re-starts).

So, if you are worried about being forced into compulsory liquidation or you want to liquidate your company voluntarily with a CVL, contact with the team at Clarke Bell on 0161 907 4044 or

We can help you, as we have helped thousands of other company directors over the last 28 years.