If there’s no other way around for your company to do than undertake a business liquidation, then it has to be done responsibly. While it is not a good idea to close a business, liquidating a company is necessary to make things work better for every stakeholder. One of the many questions surrounding this decision is how long will it take? There are several variables involved and there’s really no set time-frame for a business liquidation without sufficient information available. However, once enough information is provided, the liquidator can act promptly and the company can be liquidated within 2-3 weeks.
Such time-frame happens when the liquidation is voluntary or there has been a clear decision to liquidate and majority of the shareholders agreed to the short notice. It can then happen as fast as 7 days as long as there’s enough statutory notice period given to the creditors. When it comes to compulsory business liquidation, the process may take longer with several stage to follow.
- Statutory demand sent by a creditor - once this happen, the company has 21 days to settle the payment, or 18 days to set it aside.
- Winding up Petition hearing - following the issuance of statutory demand, the next step for the creditor is to accomplish application for a winding up petition hearing, which may take about two weeks. It can be shorter or longer depending on how the court will respond to it.
- The Winding up Hearing - a 14-day written notice should be given to the company in question for the winding up hearing.
In the midst of all these, where does a liquidator or insolvency practitioner comes in? Well, after these professionals have been appointed for the role, their responsibility is to act as the third-party to supervise everything about business liquidation. They are responsible of many things, which include the following:
- Distribute the liquidated or realized assets to the concerned parties.
- Know all the outstanding claims and satisfy those in order of priority according to law.
- Check for any fraudulent or illegal transactions that might be happening during the course of the liquidation, which includes carefully investigation of the activities of the company