Closing Ltd. Co. - proceeds held by liquidator until final?

[menousername]

Sorry chaps..seems PH has updated itself again and for me the search function isn't working so I cannot see if this has been asked recently

Ltd. company closure procedure...using liquidators to close it out, deregister it, etc etc

Is it normal / mandatory for them to take the proceeds into a client account of theirs then distribute it to you at the end of the process, minus creditors etc?

Can they not just process it and leave the distribution to the company itself?

Involves complete lack of control over assets and proceeds

[anonymous-user]

It was similar when I did it.

The only difference was that our liquidator paid out an initial distribution of part of the funds, but then almost the entire balance sheet was cash as i'd already sold all the assets and paid all the creditors prior to entering the MVL.

[Alpinestars]

Liquidators have a personal liability if funds are distributed incorrectly. They will only make distributions as and when they are certain there are no other creditors they need to pay before the distribution, and only after they have gone though the statutory process of identifying distribution creditors.

This can result in interim and final distributions depending on the complexity of identifying assets and liabilities.

[menousername]

But to do that do they really need to take the cash and proceeds into their own possession

[UpTheIron]

menousername said:

But to do that do they really need to take the cash and proceeds into their own possession

Yes, and as part of their disbursements included within their overall fees you should be paying for a bond to cover the unlikely event of the liquidator running off with the funds.

Do you have liabilities outstanding? If not I would expect one or more distributions to be made early on in the process.

[menousername]

Nope all liabilities taken care of already

Liquidator just need a to take care of the winding down

Didn't realise it would involve moving remaining funds to their own account / control

[Eric Mc]

Liquidators look after themselves first - so just be aware of that.

[menousername]

In what way...what should I be mindful of?

[nyt]

If your company is solvent (no liabilities / debts etc) then you can just apply for the company to be struck off. It's cheap and straight forward.
Do take all money from your bank accounts first though otherwise you'll probably have to get the company reinstated to gain access to them.

https://www.gov.uk/closing-a-limited-company

No need to involve liquidators

Edited by nyt on Monday 7th September 09:18

[Eric Mc]

menousername said:

In what way...what should I be mindful of?

Their fees.

[UpTheIron]

nyt said:

If your company is solvent (no liabilities / debts etc) then you can just apply for the company to be struck off. It's cheap and straight forward.
Do take all money from your bank accounts first though otherwise you'll probably have to get the company reinstated to gain access to them.

https://www.gov.uk/closing-a-limited-company

No need to involve liquidators

Edited by nyt on Monday 7th September 09:18

However not necessarily the most advantageous way of doing it.

[UpTheIron]

OP - I presume you have a large cash reserve, hence are looking at an MVL so that you can obtain ER on the capital distribution, rather than paying income tax on a dividend?

www.mvlonline.co.uk have a pretty good reputation and a good explanation of the process.

[R11ysf]

When you say a good reputation may I ask from whom? Looking at their website it looks ok but checking the names of the 2 advisors only returns one of them on the official government register here https://www.insolvencydirect.bis.gov.uk/FIP1/Home/...
and even then his name is down against a different practice. Their company name brings up no registration on the list of insolvency practitioners website whatsoever.

I'm looking at this at the moment and when you are handing over large amounts of cash to someone you don't know I'd rather pay up a little for safety with a firm who have 10 registered practitioners than the company with none but a nice easy to understand website.

[UpTheIron]

Happy clients on forums.contractoruk.com - http://forums.contractoruk.com/accounting-legal/80...

[R11ysf]

Thanks for the link. To be honest that doesn't really allay my fears very much, a lot of the testimonies/thanks are from people with <3 posts on that forum and a couple of the resounding thanks are form people with 1 post.

I know post count isn't everything but when handing over control of large sums of money to people I don't know (and the main guy posting there admits he isn't even a qualified or registered liquidator himself) then I think I'll stay with a much bigger firm.

I'm sure they are fine and legit etc but for me if it costs me an extra £500-1000 for peace of mind then so be it. I've found several places in the £1000-1500 region (plus disbursements which they all are) so I think I'll go with a large firm that has 10 practitioners and 50+ employees rather than a place that has 1.

[UpTheIron]

Fair enough. I actually used Wilson Field recently (currently have 8 IP's and were a little bit cheaper to boot!)

[anonymous-user]

R11ysf, as it happens, David Thorniley is the liquidator that I used for my MVL, albeit not through MVL Online, but through what must be his other company, Traverse Advisory.

He was recommended by my accountant and I found him to be very efficient and highly professional.

Feel free to message me if you'd like any more info.

[menousername]

Thanks guys very helpful even the concerns of some of you help focus my mind

I have been seeing fees in the region of 1k too and upfront, plus a bond, so I am not so concerned about any conflict of interests in the distribution.but like a previous poster going through the process said, the handing over of the company proceeds and the loss of control are the main worried.

Again I wonder if that has to be done or whether any liquidators let you make the distributions yourself in accordance with their instructions

[Eric Mc]

Why is "Striking Off" not an option?

Have you spoken to your accountant about this?

[menousername]

Not sure

Have reached back out to accountant about alternative options

Think the recommendation may have been influenced by potential comms