Can I liquidate a limited company with no money?
If your limited company has unmanageable debts (it’s insolvent) and no realistic prospect of making a recovery, your only option is to close it down. If you were to continue trading an insolvent company, you could face serious consequences including personal liability for company debts and a director disqualification.
You can close an insolvent company voluntarily via a Creditors’ Voluntary Liquidation (CVL). As part of the process, a liquidator sells the company’s assets to repay the parties it owes money to (its creditors) before closing the company down. But what happens if your company has no assets (stock, equipment, vehicles, etc.) to sell and who pays the liquidator’s fee?
Suggested Pages:
Can I liquidate a company with debts but no assets?
Liquidation is an appropriate way to close a limited company with debts, even if it doesn’t have any assets. There are two ways to liquidate a company:
Creditors’ Voluntary Liquidation (CVL)
By liquidating the company voluntarily via a CVL, you are being proactive and prioritising your creditor’s interests, as you are not incurring further debts you cannot pay. That helps you meet your legal duties as a director of an insolvent company and reduces the risk of receiving a penalty.
You must appoint a licensed Insolvency Practitioner to administer the liquidation process. Ordinarily, the liquidator will sell the company’s assets and distribute the money among its creditors. Any debts that remain unpaid will then be written off. However, if your company has no assets to sell, all its debts will be written off and the company will be closed.
You’ll need to think about how you’ll pay the liquidator’s fee, which is usually covered by the sale of assets. No asset liquidations typically incur lower fees as there are fewer administrative and procedural tasks, but the liquidator will still need to be paid.
Compulsory Liquidation
The other way to close a company with debts but no assets is to wait for a creditor to issue a Winding Up Petition against your company. That forces it into Compulsory Liquidation, which leads to the closure of the business and doesn’t involve you paying any fees.
Although the lack of fees can be appealing, the fact that it has taken a creditor to close your business means your actions in the period leading up to liquidation will be closely scrutinised. If the liquidator finds you have not met your legal duties as a director or there’s evidence of misconduct, you could face serious penalties.
How do I pay for liquidation if my company has no assets?
Creditors’ Voluntary Liquidation is usually the best way to close your business as it helps you avoid the adverse consequences of Compulsory Liquidation. You must appoint a licensed Insolvency Practitioner (IP) to liquidate the company on your behalf and pay their professional fees.
As the company has no assets to sell, one option is for the directors to pay the liquidator’s fee using their own funds. A CVL typically starts at around £3,000, but as it’s a no-asset liquidation, it could be less. If you have multiple directors, you may only have to pay £1,000 each for a formal process that gives you the peace of mind of meeting your legal duties to your creditors.
However, there’s another option that company directors often overlook. When you liquidate an insolvent company, you may be entitled to claim redundancy pay. Director redundancy pay in the UK averages around £9,000. That would more than cover the cost of the liquidation process and contribute towards any personal guarantees you have given to secure company borrowing.
Am I eligible for director redundancy pay?
If you have worked as an employee of the company for at least two years, you may be eligible to claim director redundancy pay. You must have:
- Worked for the company for at least 16 hours per week
- Received a regular salary via PAYE
- Had a written, verbal or implied employment contract
- Fulfilled more than an advisory role
- Invested in the company or loaned the company money it has not repaid
How can Scotland Liquidators help?
If your company has debts it cannot pay and no assets, we can help you explore potential rescue options and discuss the most appropriate closure method. We can also determine your eligibility for redundancy pay and other statutory entitlements. Contact our licensed Insolvency Practitioners for a free, same-day consultation or arrange a meeting at one of our offices in Scotland.

I knew I needed to close my company but I wasn’t sure how to go about this with large debts that I was unable to repay. Scotland Liquidators clearly explained my options and held my hand throughout the entire process.
Catherine Muller | Director
I would highly recommend Scotland Liquidators to anyone considering closing their business. From the first phone call I knew where I stood and what my options were. I cannot thank them enough.
Jonathan Booth | Director
Scotland Liquidators helped me close my company last year after I made the tough decision to stop trading. My advisor was patient, knowledgeable, and supportive from start to finish. Many thanks.
Colin Franklin | Former CEO
