The eight people included one person paid for by another council and they are said to have settled into their new residences following the council's action at Caradoc House, in Ludlow Road, Little Stretton.
In a statement, Shropshire Council said it has found alternative homes for residents at Caradoc House after learning that the owner which operates the home had sought voluntary liquidation.
A council spokesman said: "Shropshire Council has found alternative homes for residents it had placed in the privately run Caradoc House care home in Church Stretton
"The council acted after learning that the owner who operates this home sought voluntary liquidation for Caradoc House."
The council said it had also been looking into a "number of quality issues" with the owners of Caradoc House. It follows an inspection by the Care Quality Commission in September 2022, rating the care home as inadequate.
"In addition to this, despite working on a plan with the owner to seek to address the concerns raised by the inspection, there have since been a number of contract breaches with the council by the owner," the council spokesman added.
The home’s owners have told the council they intend to create a new organisation to run Caradoc House.
But the council spokesman added: "Due to the issues of insolvency and quality raised by the CQC, the council feels the change in ownership would neither address these nor meet our contract standards.
"Council social care teams have worked with the residents and families placed at Caradoc House and they are now settling in well to new care homes, where they are receiving the care and support to meet their needs."
Liquidators have been appointed to wind up Caradoc House Care Services Limited, based at Ludlow Road, Little Stretton, which is owes 12 company creditors more than £339,000.
The major creditor is HM Revenue and Customs, owed £212,515. Companies House has been told that a sale of furniture and other assets could raise £10,000 for preferential creditors.
HMRC presented a petition to wind up the company at the High Court of Justice on January 11.
Following this, the company's majority shareholder, Norriz Farol Andal, held a meeting of the creditors on January 20 and a resolution to wind up the company was put in a virtual meeting.
Insolvency practitioner Philip Booth of Booth & Co, in Ossett, Wakefield, was appointed.
Mr Booth declined to comment on the collapse of the company. His role will be to sell the company's assets on behalf of creditors.
Norriz Farol Andal, aged 49, is listed on the Companies House website as being a director of three care companies: Caradoc House, Keegan's Court Care Services limited in Kerry Lane, Bishop’s Castle, and Church Stretton Care Services Limited, also at Keegan's Court, Kerry Lane, Bishops Castle.
Church Stretton Care Services Limited was incorporated on January 9 this year.
The Care Quality Commission (CQC) rated Caradoc House Care Services Limited, as inadequate during an inspection on August 24, 2022.
Inspectors found a care home providing support with accommodation and personal care for up to 11 people.
They found a slew of problems, summarising: "People were not safe. The provider failed to ensure substances hazardous to health were safely stored, firefighting equipment was readily available or that window restrictors were in place on all windows."
Inspectors added that the provider did not effectively analyse significant incidents to learn from them and to make changes to improve people's safety, and the provider's infection prevention and control procedures were not effectively followed.
They said people were not always treated with dignity or respect, confidential information was not secured and was accessible to those without authority and people's personal property was not safely or appropriately stored.
The CQC said: "The overall rating for this service is 'Inadequate' and the service is therefore in 'special measures'. This means we will keep the service under review and, if we do not propose to cancel the provider's registration, we will re-inspect within six months to check for significant improvements."
The organisation's website said it was carrying out a quality review.
A spokesman for the CQC said: "The local authority is the body responsible for finding care home residents alternative accommodation so you may wish to contact them."
The CQC confirmed that the care home itself - Caradoc House Residential Care Home - hasn’t gone into liquidation; it is the company associated with it - Caradoc House Care Services Ltd - that has.
The registered provider is Kevindale Residential Care Home, registered at Caradoc House Residential Care Home.
The CQC confirmed that both are still registered with it.
Caradoc House Care Services Ltd is the company which has appointed liquidators. This company is not registered with the CQC but was who the local authority contracted with.
Kelvindale has three registered care homes:
Caradoc House Residential Care Home, in Ludlow Road, Little Stretton, Church Stretton which is rated overall inadequate.
Keegan's Court Residential Care Home in Kerry Lane, Bishop's Castle, which is rated overall inadequate.
Kevindale Residential Care Home, in Kevindale, Broome, Aston On Clun, near Craven Arms, which is rated as requires improvement.
Mr Andal has been approached for comment.