Liquidation – The disadvantages of liquidation

If you are considering voluntary liquidation, then you should weigh up the pros and cons of the liquidation process first, to decide whether or not liquidation is right for your business.

There are a number of disadvantages to liquidating your business.

• If you want the assets of the company then you have to buy them.
• You will need to set up a new company if you are intending to go back into business.
• You will be subject to a comprehensive investigation by the Liquidator into the conduct and the affairs of the company generally, which may lead to an action being brought for the disqualification or other such actions resulting in potential personal liability.

There are some disadvantages for your creditors too.

• It costs money to petition for a company’s liquidation.
• Liquidation provides little opportunity for the recovery of funds for creditors.

It is really important that you also look into the advantages of liquidation and the alternatives to liquidation before making the decision to liquidate your company.

Remember: Not all companies in liquidation are insolvent.

More information

• Liquidation – The advantages of liquidation
• Liquidation – The alternatives to liquidation
• Liquidation – What is liquidation?
• Liquidation – The liquidation process
• Liquidation – Winding up a company
• Liquidation – Voluntary and involuntary liquidation
• Liquidation – I am owed money by a company in liquidation
• Liquidation – Insolvency and liquidation