There is a common misconception that the difference between Liquidation and Receivership is that a Receiver will ‘trade on’ to rehabilitate a business, whereas a Liquidator will stop the business from trading, make the staff redundant and sell the stock.
However, this is not correct. The Liquidators have the option to allow the business to continue trading, if they believe that it is in the best interests of the company’s creditors. However, they will only trade on with a view to completing a profitable contract, or to sell the business as a going concern. All decisions to trade on a business will be made by the Liquidators after full consideration of the potential sale options, the business model and once a budget has been completed.
Therefore, even if your business is still trading, you can elect to put the company into liquidation. If your company is insolvent, this may be the best option. Making the decision to liquidate can be a relief to business owners.
At the point of liquidation it is up to the Liquidators to talk to staff, work with potential purchasers, and deal with creditors. When your business is in financial trouble, it can be a very difficult time. We are experienced in dealing with these situations and can relieve some of the stress you may be dealing with. Please contact us to discuss your business options.