By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
The News God
  • Politics
  • News
  • Business & Finance
  • Lifestyle & Health
  • Law
  • Sports
  • Tech & Autos
  • Home and Garden
  • Other Categories
    • Travel
    • Education
    • Entertainment
    • General
Reading: Compulsory vs. Voluntary Company Liquidation: What’s the Difference?
Share
Aa
The News God
Aa
  • Politics
  • News
  • Business & Finance
  • Lifestyle & Health
  • Law
  • Sports
  • Tech & Autos
  • Home and Garden
  • Other Categories
Search
  • Politics
  • News
  • Business & Finance
  • Lifestyle & Health
  • Law
  • Sports
  • Tech & Autos
  • Home and Garden
  • Other Categories
    • Travel
    • Education
    • Entertainment
    • General
Follow US
  • Why You Need to Read Business News Everyday
  • Why You Need to Read Business News Everyday
  • Advertise
  • Advertise
The News God > Blog > Business & Finance > Compulsory vs. Voluntary Company Liquidation: What’s the Difference?
Business & Finance

Compulsory vs. Voluntary Company Liquidation: What’s the Difference?

Abubaker Rafiq
Last updated: 2022/03/14 at 10:13 PM
Abubaker Rafiq  - Content Writer Published March 14, 2022
Share
4 Min Read
SHARE

Has your business been going through harsh times?

Contents
What Is Company Liquidation?How Compulsory Liquidation WorksHow Voluntary Liquidation WorksThat’s How Company Liquidation Works

If so, you’ve likely thought about eventual company liquidation. You might want to liquidate your company to get out before things get tougher.

Or, you might wish to liquidate your company because you’ve got no other choice!

So what’s the difference between compulsory liquidation and voluntary liquidation? What should you know about preparing for either scenario?

Here’s what you need to know about this possible scenario for your company:

What Is Company Liquidation?

This is the process when you finalize your company’s affairs to sell it or close it down.

Liquidation involves selling all the company’s assets including property. It can also include paying off any debts owed to creditors and/or vendors.

Once you complete the liquidation process you have to inform the company registrar. The company will then get listed as “closed” on official records.

This can be a rather lengthy process depending on how many assets your company has. As such, you might want to consider hiring a business attorney to assist you with liquidation.

How Compulsory Liquidation Works

This type of liquidation occurs when your creditors put pressure on your company to close. It’s often due to excessive debts, bankruptcy, or any other financial obligations that you can’t fulfill.

Often, your creditors will file a petition in a local court. If the petition gets accepted, then an Official Receiver takes over your company.

They’ll investigate the creditor’s complaints and will work to distribute any remaining funds to the creditors. They’ll then hire a liquidator to close your company.

You’ll lose access to your company during this process. You’ll then be informed once the procedure is completed. This can hurt your reputation as an entrepreneur so you want to try to avoid it at all costs!

How Voluntary Liquidation Works

If you do need to liquidate your company, you want to ensure that it’s a voluntary process.

You might want to hire a professional service such as companydoctor.co.uk to assist you with voluntary liquidation. This is when you can’t fulfill all your financial obligations to your creditors.

With the assistance of a liquidator, you’ll prepare an agreement with your shareholders, creditors, and vendors. You don’t have to worry about getting a court involved with this procedure.

This process is a lot more efficient than compulsory liquidation. It’s also the ideal situation for entrepreneurs as it doesn’t tarnish your reputation. After you complete the liquidation process, you can close your company.

That’s How Company Liquidation Works

Now you know the basics of company liquidation and can decide if it’s the best way forward to your struggling business.

You have to try to avoid compulsory liquidation if you can. This requires the court to get involved and you’ll lose control over your business.

If you opt for voluntary liquidation you can negotiate a deal with your shareholders and creditors. You don’t have to worry about the court getting involved and you’ll just need a service to assist you with the process.

You can find more tips on company liquidation on our blog!

You Might Also Like

Sell Your Car Quickly and for More By Opting for a Private Sale

What Are Security Agencies?

Type of Funds in ULIPs

4 Kinds of Entrepreneurs That Should Invest in a Digital Marketplace

Confidence in Business and Where You Might Need It

Abubaker Rafiq March 14, 2022
Share this Article
Facebook Twitter Email Print
Share
Previous Article Electrical Hazards: How to Make Your Home a Safe Haven
Next Article 7 Key Considerations When Buying A New Home In Florida
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Stay Connected

235.3k Followers Like
69.1k Followers Follow
11.6k Followers Pin
56.4k Followers Follow
136k Subscribers Subscribe

Ads

Latest News

Sell Your Car Quickly and for More By Opting for a Private Sale
Sell Your Car Quickly and for More By Opting for a Private Sale
Business & Finance February 3, 2023
An overview of the current state of language translating headphones and their capabilities
An overview of the current state of language translating headphones and their capabilities
Tech & Autos February 3, 2023
The cost of keratin treatment in professional salons and in daily home care
The cost of keratin treatment in professional salons and in daily home care
Lifestyle & Health February 3, 2023
What Are The Top Ways Security Guards Protect Your Premises?
What Are Security Agencies?
Business & Finance February 3, 2023

You Might also Like

Sell Your Car Quickly and for More By Opting for a Private Sale
Business & Finance

Sell Your Car Quickly and for More By Opting for a Private Sale

February 3, 2023
What Are The Top Ways Security Guards Protect Your Premises?
Business & Finance

What Are Security Agencies?

February 3, 2023
Business & Finance

Type of Funds in ULIPs

February 3, 2023
Offer Technology That Your Audience is Already Using Any digital marketing or UX expert will tell you that the key to success is to ask as little from your target audience as possible. This means collapsing your sign-up process so that it involves no more than one or two steps. The online casino industry seems to have absorbed this message earlier than most, as is evident by the fact that many casinos go above and beyond to offer their services via technology that their audience is already using.
Business & Finance

4 Kinds of Entrepreneurs That Should Invest in a Digital Marketplace

February 3, 2023
Show More

© 2022 Thenewsgod. All Rights Reserved.

  • About
  • Contact Us
  • Terms of Use & Privacy Policy
  • Advertise
  • Disclaimer

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?