What Happens to a Company Bank Account During Liquidation?


When a company enters liquidation, one of the first practical changes directors will notice is what happens to the company’s bank account. This is an important part of the process, as control of the company’s finances shifts away from the directors and into the hands of the appointed liquidator. As soon as a company goes into liquidation, the bank will typically freeze the company’s accounts. This means that no further payments can be made, and directors can no longer access or use the funds. The purpose of this freeze is to protect the remaining assets of the company and ensure that all transactions are properly controlled.

At this stage, the liquidator takes over responsibility for the company’s financial affairs. They will contact the bank, inform them of the liquidation, and arrange for the account to be transferred under their control. The liquidator may either use the existing account or open a new insolvency account where all funds are consolidated. Any money held in the company’s bank account forms part of the company’s assets. These funds are then used as part of the overall liquidation process. The liquidator will gather all available assets, including cash balances, and distribute them to creditors according to the legal order of priority.

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