What is the difference between dissolving and liquidating a company

The company will stop doing business and employing people.

The company won’t exist once it’s been removed (‘struck off’) from the companies register at Companies House.

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A Liquidator is appointed to administer the liquidation of the company’s assets and to distribute the proceeds to creditors in accordance with law There are also Court Liquidations.

This process may be instigated by a creditor seeking to recover monies owed.

A company may be “cash insolvent” but have assets which exceed their liabilities.

In this case additional funds may not be possible to source and therefore the members will be required to “liquidate” their assets to meet their debts – i.e.

You’ll need to restore your company to claim back money after it’s been removed from the register.

Winding up a company is most commonly used to describe the process of the insolvent liquidation of a company.

Closing a limited company can seem like a bit of an ordeal, and whilst it certainly can be, this impression is no doubt thanks to the jargon that’s bandied about when it comes to the process.

In this post we shall look at three (well technically four) culpable words; dissolution, liquidation and winding up, and explain what they actually mean - in plain English. This means the end of the company as a legal entity.

realise the value of their assets to pay off their debts.

You can choose to liquidate your limited company (also called ‘winding up’ a company).

When you liquidate a company, its assets are used to pay off its debts. You’ll need a validation order to access your company bank account.

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