Yes, you can liquidate a company with no money in the bank. Liquidators are almost always paid from the company's own assets, its book debts, or a director redundancy claim — not from cash you find yourself. Where a company genuinely has nothing left, there are still routes to get it closed properly.
This matters because leaving an insolvent company open is riskier than closing it, even when funds are tight. Below is how liquidation is actually funded when there's little or no money, what happens if there are no assets at all, and the practical next steps for a director in this position.
Why liquidation costs money even when you have none
A liquidation isn't free because a licensed insolvency practitioner (IP) has to be appointed to take control of the company, deal with creditors, and close it down correctly. Their time, and the legal process itself, has a cost — regardless of how much cash the company holds.
The confusion usually comes from assuming you, personally, have to pay that cost upfront from your own pocket. In most cases, that isn't how it works. For a fuller breakdown of typical fees, see our guide on how much it costs to liquidate a company.
How to liquidate a company with no money: paying the fees
When a company can't pay its debts, the standard route is a Creditors' Voluntary Liquidation (CVL) — the director-led process for closing an insolvent company. Our guide explains what a Creditors' Voluntary Liquidation (CVL) involves in more detail.
In a CVL, the liquidator's fees are typically paid in one or more of these ways:
- From the sale of any remaining company assets (stock, equipment, property, vehicles).
- From money owed to the company by customers (book debts) once collected.
- From a director's statutory redundancy and notice pay claim, where the director was also an employee.
- Occasionally, from a third-party contribution agreed separately with the director.
Because of this, many directors liquidate a company with no money sitting in the business account at the point they act — the funding comes from elsewhere in the process, not from savings.
Funding from company assets and book debts
Even a struggling company often holds something of value: unsold stock, tools, a van, office equipment, a lease, or unpaid invoices from customers. The liquidator identifies and realises these on behalf of creditors, and their fee is usually taken from the proceeds before anything else is distributed.
Book debts — money customers still owe — are often the most overlooked source of funding. A liquidator can pursue these formally, sometimes recovering more than a director could informally, which can be enough on its own to cover the process.
Redundancy payments and director claims explained
If you were also an employee of your company (paid through PAYE, with a contract of employment), you may be entitled to statutory redundancy pay, notice pay, and holiday pay when the company closes, in the same way as any other employee.
These payments come from the National Insurance Fund, not from the company itself, so they don't depend on the company having cash. Many directors use part of this claim to cover the liquidator's fee, with any balance paid to them personally. Eligibility rules are set out in the government's guidance on your rights if your employer becomes insolvent.
What happens if there are genuinely no assets
Some companies really do have nothing left to sell and no debts owed to them. In that situation, a full CVL may not be realistic, but the company still needs to be dealt with properly rather than simply abandoned.
Depending on the circumstances, a regulated specialist may discuss options such as:
- Voluntary strike-off through Companies House, where the company qualifies and no creditors object.
- A creditor petitioning to wind up the company instead, if a creditor takes that step.
- A reduced-fee or deferred-fee liquidation arrangement, agreed directly with an insolvency practitioner.
Which route applies depends on the company's specific debts, assets and creditor behaviour, so this is exactly the kind of decision worth discussing with a regulated specialist rather than guessing. Our overview of company insolvency options and which route fits is a useful starting point.
The danger of doing nothing
Leaving an insolvent company dormant, unfiled and unpaid doesn't make the problem disappear. Companies House can strike the company off for failing to file accounts, but that doesn't resolve director duties or protect against creditor action in the meantime.
A creditor owed money can apply to the court for a winding-up petition, which is a more disruptive and public process than a director-led liquidation, and is advertised in The Gazette. Directors also have ongoing legal duties under the Insolvency Act 1986 once a company is insolvent, including acting in creditors' interests. Acting early, even without cash in hand, generally leads to a calmer, better-controlled outcome.
Practical next steps to get closed
If you're trying to work out how to liquidate a company with no money, the practical starting point is usually the same regardless of your exact figures:
- List what the company owns (assets, stock, equipment) and what it's owed (book debts).
- Check whether you were paid as an employee, as this affects any redundancy claim.
- Gather basic paperwork: recent accounts, a list of creditors, and any correspondence about debts.
- Speak to a regulated insolvency practitioner about your specific position before deciding on a route.
Official guidance on the formal process is also available directly from gov.uk on liquidating your company. Harbourfirst doesn't carry out liquidations itself; we introduce directors to regulated specialists who assess the details and advise on the best way forward.
Frequently asked questions
Can I pay a liquidator in instalments?
Sometimes. Where fees are being funded from assets or a redundancy claim, payment often happens naturally in stages as those sums are realised. Some practitioners will also discuss a payment arrangement directly with you — this is something to raise early in the conversation.
Is there any free help available?
Many regulated insolvency practitioners offer a free, no-obligation initial conversation to assess your company's position before any fee is agreed. Gov.uk also publishes free general guidance on the liquidation process.
What if my company has no assets and no book debts?
It still needs to be closed properly. Depending on the circumstances, this might mean voluntary strike-off, a reduced-fee liquidation, or another route — a regulated specialist can advise which applies.
Will I have to use my own personal savings?
Not usually. Liquidation fees are typically funded from the company's own assets, book debts, or a director's redundancy claim, rather than from personal funds.
Does it matter how small the company is?
No. Small and single-director companies go through liquidation regularly, and the same funding routes — assets, book debts, redundancy claims — usually apply whatever the company's size.
This article is general information, not legal, financial or insolvency advice. Every company's position is different, and directors should speak to a regulated specialist about their own circumstances before making decisions.
If you'd like to talk through your options, Harbourfirst can introduce you to a regulated insolvency specialist — start an enquiry.