Company liquidation cost is highly variable and depends on the specifics of a case. It is also a question of how much time is spent on closing a business – larger companies with more complex affairs tend to require more professional input, which in turn increases the fees.
Among the most significant company liquidation cost are those associated with valuing and realising assets. This includes tangible assets such as equipment and vehicles, but also intangible assets such as goodwill or intellectual property. Intangible assets can carry high values in a balance sheet, but often they will depreciate at a different rate to physical goods, which makes determining the value of these assets difficult.
Counting the Cost: Evaluating the Expenses of Company Liquidation
Valuation of the assets is also dependent on market demand – if there is a surplus of an asset in the marketplace, then its value will decrease. Conversely, if there is a strong demand for an asset, then its value will increase. This means that the valuations placed on assets for liquidation will be conservative, and this can often result in bargain sales. This is often seen when large retail chains close down on the high street, where many items can be purchased for significantly less than the recommended price.
Other liquidation costs include legal and accounting fees, statutory advertising (by law the liquidator is required to advertise his appointment), and costs associated with storing the company’s records. The costs of a small, straightforward voluntary liquidation might not exceed a few hundred pounds. Alternatively, if there is no debt and minimal assets to realise, it might be possible to close a limited company using the ‘strike off’ method by applying for its dissolution at Companies House.
…
