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Can a Liquidation Process be a Tough One?

There could be a lot of reasons why company become insolvent. Company comes to a point that they can no longer pay their debts. There might be some solutions to this situation but in the end it can be company liquidation. However before liquidation can be done, the reasons why the business is failing needs to be investigated and all other information as well. The liquidation can be voluntarily or ordered by court. There are steps that can be done by the company for the liquidation. There are also people who can be involved in helping the company for example are accountants.

Liquidation will happen if in case that the court ordered it or voluntarily done by the shareholders or directors. The company will voluntarily liquidate assets so they can settle their obligations since they cannot meet their financial obligations anymore. But then there will be investigation that will be done. A liquidator is going to be appointed to investigate on why the company did not make it, and also in assessing the true value of the assets and the properties of the company. After assessing the value of the assets and properties, the amount converted will be settlement to the company’s debt. The disadvantage of the liquidation is the risk of finding the true value of the assets and also what happened why the company failed.

The insolvent company liquidation always has a process to follow. If the company cannot settle their obligations, the decision of liquidation can be decided voluntarily by the shareholders and directors or ordered by the court. Since there will be liquidation, there will be a liquidator who will be assigned to investigate and find out all the necessary information for the liquidation process. The liquidator should notify the office and then creditors will be confirming the liquidator as well. Liquidation will start and the liquidator will be assessing all the assets and then proceed with the other investigation. After all the investigation has been done and completed, reports will be sent to the parties for settlement of the obligations. Another thing, during liquidation a pre-pack admin can be also considered. This is to preserve the business, where there can be a third party who can buy some assets and transfer these to the new company.

Businesses can ask for liquidation advice so they will be able to meet their unsettled obligations. There could be some alternatives aside from this but in the end the liquidation is still the last option. The pre-pack administration can be done to save the assets as a fresh new start. Company should understand at first about their business if it is going to work even in the future. And they should also make sure that their workers are safe with the governing laws. Everything should be planned, strategies should be delivered positively and also other alternatives should be present. Always consider things in a long-term basis and also share the plans and the possible strategies with all the shareholders and the directors.