If you have ever known someone who has gone through the trauma of a liquidation, you won’t need us to answer this question.
Not only are liquidations expensive and time-consuming, the liquidator has a legal duty to investigate the conduct of any Directors associated with the business.
If the liquidator decides that the Director has not acted in the company’s best interest, they will request that the situation is put right. This always means repaying money. The liquidator will appoint a solicitor to collect money from you personally as they will argue it is your “fiduciary duty” to take care of the company’s interests. You will then have to appoint your own solicitor to defend your actions (if they can be reasonably defended). The costs of legal defence is often huge, the situation is enormously stressful. Then if you lose you will have to repay all of the money, interest, charges and possibly the other sides costs too. This is why you see so many personal bankruptcies caused by company liquidators.
When you sell your company, these issues can’t happen. The buyer will take the company in its current state, fully aware of all its debts and liabilities and they will step into your shoes. Problem solved.