If your limited company is insolvent, and you are considering Liquidation, it is helpful to understand how long the process will take.

It takes a few weeks to place a company into liquidation from the initial instruction from the directors. This is to ensure that all correct information has been received from them. Creditors are also required to receive sufficient statutory notice of the liquidation under Rule 15.11 of the Insolvency (England and Wales) Rules 2016.

Creditors Voluntary Liquidation (CVL) Process

There are different types of liquidation, but below we'll outline the process for a Creditors Voluntary Liquidation.

The process starts when the board of directors resolve to place the company into liquidation and appoint a liquidator.

The Shareholders then resolve at a General Meeting of Members, or by written resolution, to vote on the board's decision to wind-up the company. 75% (or more) of the shareholders must pass a special resolution to place the company into liquidation.

Next, there is a virtual meeting of creditors (should a deemed consent procedure not be chosen). At this meeting creditors are given the opportunity to put questions to the directors. The Company's creditors have an opportunity to vote on the on the nomination of the liquidator. If no nominations from creditors are received, then the appointment of the liquidator chosen by the company takes office. Under the new Insolvency Rules, a physical meeting can be called if requested by creditors (providing certain conditions are met).

Concluding the Liquidation

Once a company is placed into liquidation, it takes on average 6-12 months for the liquidator to conclude the liquidation. This is to ensure that the liquidator complies with his/her statutory duty under the Company Directors Disqualification Act 1986, to undertake his/her investigations under SIP 2 (Investigations by Office-Holders in Administrations and Insolvent Liquidations) and to wind down the affairs of the company generally.

For a more detailed look at the procedure for a Creditors Voluntary Liquidation.

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