How much to liquidate a company?

[MarkOnline]

I am trying to purchase a Ltd company. If the seller and I cant reach an agreement what sort of money would a liquidator charge to wind up the Ltd co?

The Ltd co has approx £20 k cash and £20k in assets with a bounce back loan outstanding.
Thanks

 

[Chris Parkman]

Depending on the complexity, and number of creditors etc, anywhere between £3,000 to £5,000 plus VAT.

 

[ChrisCallaghan]

Depending on the complexity, and number of creditors etc, anywhere between £3,000 to £5,000 plus VAT.

I'd echo @Chris Parkman's comment. Practically speaking the company's assets would be sold, and coupled with the cash at bank there is more than sufficient there to cover a liquidator's fee. Anything left over would then be distributed to the company's creditors.

 

[Robert Moore]

No less than £3000. Any quote lower than that is not really likely to be accurate. There will be other costs added on. Read our CVL guide for more information

 

[Lisa Thomas]

Assuming you are talking about a Creditors Voluntary Liquidation, instigated by the company's directors and shareholders, there will be two sets of fees.

The first will be the fee to help place the company into liquidation. On average that tends to be fixed at £4-5k plus VAT.

The second is their costs once appointed as Liquidators. This will vary from firm to firm and the amount of work involved. Most IP's tend to charge on a time spent basis. I suspect the minimum amount of base costs would be £5k upwards.

Outlays will also be charged.

The costs are approved by creditors committee, creditors in general if no committee in place or the court, and are paid from the asset realisations.

If you are talking about a compulsory liquidation via the court, that is a different procedure. Often a creditor will pay to liquidate the company, but directors and shareholders can use this procedure too.

The costs are usually somewhere between £2-4k depending on whether the petitioner uses a solicitor to help with the liquidation.

Once the company has been liquidated, a civil servant, known as the Official Receiver, is initially appointed Liquidator. They used to charge an administration fee of c£3k but I can't see that on the list. They will charge 15% of realisations. In addition there will be a secretary of state tax charged at £6,000.

Another point to think about is if you buy the assets of the company, and it subsequently enters liquidation, the liquidator will investigate this transaction and can overturn it or pursue you and/or the director's if it is deemed to be at an undervalue.

More info can be found here.

Changes to Official Receiver's Fees

The fees charged to apply for bankruptcy and company insolvency are changing from 21 July 2016.

www.gov.uk

From your point of view, if you are the intended purchaser and not a creditor, director or shareholder of the seller, then the fees will have no bearing on you.

 

[Ian J]

Gavin, where are you?

 

[Elliot Green]

For a small Liquidation around £3-5k seems about right to place the company in Liquidation. You have to bear in mind there are disbursements as well, that have to be paid such as Statutory Advertising and Statutory Bonding - all of which can be expensive.

 

[Gavin Bates]

Hi

i would normally suggest £4,000 to £5,000 would be the norm.

best wishes

Gavin