How Long Does It Take To Liquidate A Company In 2025?

With operational costs rising and increased Employer National Insurance Contributions to contend with, pressures on UK businesses are high. If your business is struggling, it might be that putting your company into liquidation is a smart move, or even your only option. Time may be of the essence in this case, so it’s important to understand your next steps, including the kinds of processes you have to go through and the answer to ‘how long does it take to liquidate a company?’.

Why Liquidate A Company In 2025

The turbulent economic situation in 2025 has given business directors and shareholders a lot of reason to step back and consider their options in the face of rising challenges. It’s getting harder and harder to stay afloat, and for some businesses, the smarter choice is to voluntarily liquidate the business altogether to prevent further losses. There are two different processes by which you can liquidate a company in the UK, with each having its own requirements and timeframes.

Creditors Voluntary Liquidation (CVL)

A creditors voluntary liquidation process is appropriate for companies that are insolvent, i.e. cannot pay their liabilities as and when they fall due.

How Long Does It Take To Liquidate A Company?

Typically, the CVL process will take anywhere between 6 to 12 months, but the exact length is determined by a number of factors relating to the company’s financial circumstances and the number of creditors that need to be repaid. The key stages of the process are:

• Consultation and initial preparations (1-2 weeks).
• Passing resolutions and organising meetings (1-2 weeks).
• Creditor claims and asset management (3-9 months).
• Financial distribution and company closure (1-2 months).

Factors That Can Affect A Liquidation Process Timeline

There are a lot of factors in play that could extend the timeframe of a CVL process, including the complexity of the company’s debts, how cooperative creditors are and investigations into director mismanagement. It’s also worth bearing in mind that the difficult trading environment in 2025 has led to higher caseloads for insolvency practitioners, which could cause delays compared to previous years.

Members’ Voluntary Liquidation (MVL)

While liquidation is more typically associated with insolvent businesses, particularly in the current economic climate, this is not to say that it might not be appropriate for solvent companies too. A members voluntary liquidation can be a tax-efficient way to wind up the affairs and extract assets from a solvent company when business owners are retiring or the company has reached the end of its useful life. 

How Does The MVL Process Work?

MVLs are often significantly shorter than CVLs, generally taking 3-6 months to fully complete. This liquidation process timeline can be even shorter if the case is straightforward. Unlike CVLs, this process is normally undertaken by retiring business owners looking to extract the value of their business and benefit from the Business Asset Disposal Relief. Key steps include:

• Declaration of solvency and agreement to pay all debts (1-2 weeks).
• Shareholder resolutions and the appointment of a liquidator (1-2 weeks).
• Creditors are paid and assets are distributed (1-3 months).
• Dissolution of the company (1-2 months).

Why MVLs are Popular In 2025

Given the uncertain economic situation in 2025, some business owners are making the decision to close their business while they remain solvent, locking in their profits and taking advantage of the available tax reliefs before any changes can be put in motion. Changes to Business Asset Disposal Relief rates also came into force this year, with further changes set to be implemented in 2026. It is therefore worthwhile considering initiating the process now if you think it could benefit you and your company, locking in current rates. 

If you’re considering liquidating your company, then you need to talk to the professionals. Our experts at My Liquidation specialise in making the liquidation process as quick and simple as possible, and our experience helps us to deliver excellent service. You can get in contact with us to speak further about your business and how we can help you with a successful and timely liquidation.