Who Gets Paid First When a Company Goes into Liquidation?
When a company goes into liquidation, the most common question is what will happen to the assets of the company and in what order do people get paid.
If you are owed money by company which CRS is handling you will be able to keep up to date with the liquidation process by using our creditor portal. We load all reports we issue to creditors onto our website portal so you can view them at a time which is convenient to you.
CRS can handle all types of company liquidations:
1) Creditors’ Voluntary Liquidation;
2) Members’ Voluntary Liquidation; and
2) Court Appointed.
The process to start a liquidation
If your company is insolvent it can be wound up through a Creditors’ Voluntary Liquidation or by the Court. If a creditor is owed money it can apply to the court for a Court appointed liquidator to be appointed. Whilst a Creditors’ Voluntary Liquidation (CVL) sounds like a creditor will initiate the winding up, it is actually initiated by the directors and members of the company.
Who gets paid in a liquidation and in what order?
Secured creditors who hold security over all of the company’s assets are paid first and if there is any surplus after the secured creditor is paid, then the order of payment for the other stakeholders is as follows:
The costs of liquidation;
Priority unsecured creditors (employees); and then
If you are considering a company liquidation, you need to consult with an insolvency specialist. At CRS Insolvency Services, our consultants are all highly trained in corporate insolvency assignments. We will provide professional advice to help you make the best decision for your company while avoiding personal liabilities. Contact CRS Insolvency Services on 1800 210 073 for 24/7 free expert advice now.