When a company is dissolved, in what order are creditors paid?

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Hiya

I need to dissolve a limited company, and I will have to pay a few creditors as part of the process. Is there a certain process I need to do this in? Or can I pay them in any order I see fit?

Cheers

Answers

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When you are preparing to close down your company, you should pay your outstanding liabilities in the following order:

  1. Insolvency practitioner (if your company is liquidated).
  2. Secured creditors - banks, finance and agreement providers, asset-based lenders.
  3. Preferential creditors - Employees.
  4. Unsecured creditors - HMRC (i.e. business taxes), customers, suppliers, contractors, landlords.
  5. Shareholders or guarantors - if there is remaining capital.

For detailed guidance on dissolving a limited company, please click here.

a year ago
 

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