When a company is undergoing liquidation, the appointed liquidator must sell its assets to repay creditors. The assets must first be evaluated by a professional, and then sold at auction.
This process applies regardless of whether the liquidation was initiated voluntarily by the directors through a CVL or was mandated by a creditor through compulsory liquidation.
The proceeds from the sale are distributed among creditor groups. InsolvencySupport.co.uk offers expert support and guidance on the CVL process, and can serve as the liquidator.
What kind of company assets may be sold during liquidation proceedings?
Assets play a crucial role in the liquidation process of a company. Valuing these assets accurately is important to ensure that creditors receive the highest returns. Hard assets, such as real estate, heavy machinery, and equipment, can generate substantial amounts of money.
However, other assets, including intellectual property, office equipment, stock, and materials, also have value and must be considered during the liquidation process. A professional, independent expert is responsible for valuing these assets and ensuring a fair sale.
What is the fate of a business’ assets during a company liquidation?
During a company liquidation, its assets are put up for sale to various buyers, including competitors, through an auction process. In some cases, the company’s directors may have the opportunity to buy these assets from the liquidator after they have been appraised by an expert, although the price will typically be lower than their current market value.
Who performs the valuation of a company’s assets during liquidation?
An independent valuation of the assets is crucial to determine their fair value during the company liquidation process, which involves the sale of the business assets. The valuation helps ensure impartiality in the formal insolvency procedure.
The proceeds from the asset sale will be allocated to creditors in a specific order. Despite the sale of all assets, some of the debts may still need to be forgone due to the company’s insolvent state.
From the proceeds of the valued and sold assets, who gets paid?
An accurate valuation by a professional assessor is crucial in maximising the funds for creditors during the company liquidation process. Despite this, it’s important to note that unsecured creditors may only receive a small portion, if any, of their owed debt.
The amount generated from asset sales may vary, and may only cover the liquidator’s fees in some cases. This depends on factors such as the type and size of the business and the number of assets it holds.
The limited company structure safeguards directors’ personal assets
As a limited liability company, the personal assets of the directors are typically protected and not subject to sale in a liquidation. However, exceptions may occur if there is evidence of wrongdoing. Otherwise, the debt of the company is separate from the directors.
For additional information on the valuation of assets during a company liquidation and director redundancy eligibility, contact InsolvencySupport.co.uk. Our team of experienced professionals will be available for a free consultation and can answer any questions you may have. Simply reach out to one of our offices located across the country to schedule a same-day appointment.