Top 10 FAQs About Liquidating a UK Company in 2025

For many company directors, the idea of liquidation can feel like entering unfamiliar territory. Whether you’re closing down a solvent business or facing financial difficulties, understanding the process is key to making the right decisions. To make things clearer, we’ve put together this guide: the top 10 UK company liquidation FAQs that directors are asking in 2025.

1. What does liquidation actually mean?

Liquidation is the formal process of closing a company and bringing its affairs to an end. This typically involves selling off assets, paying creditors (where possible), and formally dissolving the business from Companies House. There are different types of liquidation depending on your company’s financial situation—either voluntary or compulsory.

2. What’s the difference between solvent and insolvent liquidation?

If your company can pay its debts and has money left over after winding down, it’s considered solvent. In this case, you’d likely go for a Members’ Voluntary Liquidation (MVL). If the company can’t pay what it owes, it’s insolvent and would go through a Creditors’ Voluntary Liquidation (CVL) or face Compulsory Liquidation.

3. Do I need an Insolvency Practitioner to liquidate my company?

Yes. For both MVLs and CVLs, a licensed Insolvency Practitioner (IP) must be appointed to oversee the process. They ensure the company’s affairs are wound up properly and legally, while also protecting the interests of creditors and stakeholders. You cannot carry out a formal liquidation without one.

4. How long does it take to liquidate a company?

The timeline can vary depending on the complexity of the company’s structure and the type of liquidation. A straightforward MVL may take around 3–6 months, while a CVL could take longer—up to a year or more—especially if investigations into company conduct are needed or assets take time to realise.


10 FAQs About Liquidating a UK Company in 2025

Location: United Kingdom

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