Day: March 15, 2024

Cost to Liquidate a CompanyCost to Liquidate a Company

There is no set cost to liquidate a company as the process can vary from case to case and it will depend on the complexity of the company’s affairs. The biggest factor that determines the cost is the time spent on closing the company which can lead to the fees being higher than expected. Liquidation costs can include marshaling (locating and bringing assets together for sale), merchandising (preparing for sale) as well as marketing and auction fees. This can also include the cost of specialists such as lawyers, accountants and financial experts.

In addition, there are often other miscellaneous expenses such as insurances a liquidator needs to put in place, statutory advertising costs (which is required by law) and the cost of storing records (which is also a legal requirement).

Calculating the Cost to Liquidate a Company: Key Considerations

The cost to liquidate a company can be very difficult to calculate without a thorough understanding of your business, however, shareholders need to know their options to prevent the risk of being pursued personally. If you would like to discuss the best solution for your business, please do not hesitate to contact Forbes Burton who can offer specialist advice.

There are two ways of liquidating a company; Members Voluntary Liquidation (MVL) and Creditors Voluntary Liquidation (CVL). An MVL is the most suitable option for solvent companies that want to close their business for any reason, such as retirement or restructuring. While a CVL is a process that can be undertaken for insolvent companies, it’s worth noting that it will incur significantly more costs than an MVL as there is a greater focus on dealing with creditors.