Can You Liquidate Your Own Company Yourself?

Why Can’t You Liquidate Your Own Company Yourself?

You cannot liquidate your own company yourself. It is as simple as that.

You cannot liquidate your own company yourself because a liquidation must be controlled by a liquidator. A director cannot control their own company’s liquidation. 

All a director can do is start the process of putting a company into liquidation by choosing a liquidation firm to undertake the process which also employs a liquidator to accept the appointment.

Why Might You Want To Liquidate Your Company Yourself?

You might want to liquidate your company yourself to save the costs of employing a liquidator, which the company cannot afford. You could also or alternatively be concerned about being investigated by a liquidator.

Liquidator Independence From Directors

A liquidator must be a Licensed Insolvency Practitioner who must be independent of the directors.

Insolvent liquidations (creditors voluntary liquidation or compulsory liquidation), involve a degree of investigation into the conduct of the directors for the reason that the company needs to go into liquidation. A director cannot investigate themselves. They are prevented from, in effect, marking their own homework.

Can You Close Your Own Company Yourself?

Yes, it is possible to close down and wind up your own company yourself. However, that is not a liquidation.

If you close your own company yourself, you can only do this by a procedure known as voluntary strike off at Companies House.

What Is a Voluntary Strike Off?

Voluntary strike off is a method of closing a company using form DS01 to be filed at Companies House.

The procedure must be strictly followed otherwise the director filing the DS01 risks committing a criminal offence. A key aspect is that creditors all must be notified and provided a copy of the DS01 form.

Why Company Closure By Voluntary Strike Off Might Fail?

Company closure by voluntary strike off may fail because a creditor may object to the striking off of the company. 

If Companies House receives an objection, then the closure of the company may be stopped for a period of time, in some cases, this can last a long period of time.