On 1 November 2022 the ‘deposit’ for the OR’s costs that the petitioner on a compulsory liquidation of a company will have pay is going up from £1,600 to £2,600.
Yes, an increase of £1,000 or 62%! The Insolvency Service have sought to justify the size of the increase by, amongst other things, the fact they’ve not increased the deposit since 2016. My heart bleeds for them! The real reason though is right now with hundreds of thousands of companies at death’s door, they don’t want to take on so many loss-making assignments.
This increase means that, from 1 November, the costs of petitioning for the compulsory liquidation of a company – whether by the directors/shareholders in instances where they want to put a company with no or minimal assets to bed – will go up from around £3,000 including lawyers’, court costs and VAT, to around £4,000, or thereabouts.
The costs of carrying out even a basic creditors voluntary liquidation has always been the equivalent of putting a small car on your driveway. Now with the cost of a compulsory liquidation nearing the same figure, compulsory liquidation will become less attractive for directors / shareholders without the free assets in the company to pay for a CVL – they will simply invite the creditors to petition while at the same time hoping the clock with the Registrar of Companies striking off the company times down OR pay for a small creditors’ voluntary liquidation. Either way, the Insolvency Service will have achieved its goal, of avoiding its service being swamped.