My company is on the verge of going bust and the directors have unanimously voted for the dissolution of business activities. We want to liquidate our assets and pay off our creditors. It is our belief that there will be enough money to pay all our outstanding debts and still have some left over to distribute to shareholders.
One of our business acquaintances was just declared insolvent and an official receiver was appointed by the court. Will the court appoint an official receiver for us or can we just contact a business liquidator? I don’t really want to lose all control of my company during the process because it is important that we make as much money as possible during the sale of our assets. Can you tell me, what is the difference between a business liquidator and an official receiver?
This question is really quite complicated and there is really no easy answer. The first thing you will need to establish beyond the shadow of a doubt is whether or not your company is insolvent. You mentioned that you are on the ‘verge of going bust’ so we can only assume that you are having difficulties paying your debts in full and/or on time.
If your company is insolvent then the court would appoint an official receiver to liquidate your assets to pay your creditors if a winding up order is made. It is important to keep in mind that an insolvent company’s main responsibility is to its creditors. Directors and stakeholders do not factor into the equation.
Going on from there, if your company is still solvent and can demonstrate that all debts can be paid then you can instruct a liquidator to sell the company's assets, pay debts and then distribute any remaining funds.
If you are looking for experts in the dissolution of a business, our insolvency practitioners can meet with you, free of charge, for a consultation. Unless the court has ordered your company into receivership, you can utilise the services of an insolvency practitioner to liquidate your business. Call us on 0800 644 6080 to set up a time to meet with you so that we can determine the best way to go about dissolution of business activities for your particular needs.