What is the difference between dissolving and liquidating a company
As the director of a limited company, if it goes into liquidation, you will only lose what you put in (assuming you haven’t guaranteed any company loans with personal assets such as your house).
If you are a sole trader (self-employed) and become insolvent, then you may personally go bankrupt.
This doesn’t have the social stigma it may once have done, but is still a hugely disruptive event.
To help you to get a better understanding of this complex area, here is Byte Start’s small business guide to insolvency, liquidation and bankruptcy; This is the catch-all title for running out of money.
There is also compulsory liquidation, where the court makes an order to wind up the company.
There are two different types of voluntary liquidation; a members’ voluntary liquidation and a creditors’ voluntary liquidation.
Within 14 days you are also required to arrange a meeting with creditors, at which you need to present a “statement of affairs” using form 2.14B.
You can download a copy of form 2.14B from this page of the website.
As a company director you, along with any other shareholders, can voluntarily liquidate the company by passing a special resolution to stop trading.
Once passed, the resolution must be sent to Companies House within 15 days and advertised in the London Gazette within 14 days.