Process of liquidating
When is the time to consider the asset liquidation process?
The three main reasons businesses consider liquidating assets are 1) when assets are no longer needed (surplus assets), 2) the business needs additional working capital, or 3) to satisfy creditors.
From April 2017 though a physical meeting of creditors The liquidator will be approved by what is termed deemed consent unless is met with objection from at least 10% of creditors (in value or number).
If there is an objection then a vote will need to be held.
Before liquidating assets it may be helpful to consult your lawyer and accountant or other tax professional for assistance in planning the liquidation.
Also, remember that if you are liquidating assets to satisfy creditors you may need to obtain their consent to do so.
The directors realise that the company is insolvent and they must stop trading.Inventory the assets your business owns and wishes to liquidate.Your list should include a detailed description of each item, photograph, purchase information, condition, warranty certificates and repair records, if applicable.In the past, the nominated liquidator (who must be a licensed insolvency practitioner) asked the directors for a list of all known creditors and he or she wrote formally to them with a creditors meeting notice (see here for examples of creditor meeting notices).Physical meetings are no longer mandatory by law, therefore the process is now slightly different but the meeting still takes place - whether it is online or over the phone. The meeting of creditors is usually a simple short meeting with no one attending and can be done online or by phone conference.