Closing a limited company down is a process that involves procedures either under the Insolvency Act 1986 or the Companies Act 2006, depending on its solvency and ability to pay debts.
Company Solvent And Able To Pay Debts
If a company is solvent and able to pay debts when they fall due, then you can:
- Voluntary strike off a limited company at Companies House – usually the cheapest option but not always the most tax efficient
- Members Voluntary Liquidation (MVL)- usually the more cost effective option if a company has assets of more than £25,000
Company Insolvency And Unable To Pay Its Debts
If a company is insolvent and unable to pay its debts when they fall due, then you can:
- Place the company into Creditors Voluntary Liquidation (CVL)
- Voluntary strike off a limited company at Companies House – there are restrictions on using this procedure for insolvent companies
- Go into Administration – if it satisfies one of the three statutory objectives
- Petition for the company to go into Compulsory Liquidation
If you want to place the company into CVL or MVL, this will require the appointment of a liquidator who is a licensed Insolvency Practitioner.
Alternative To Formal Closure: Dormant Company
An alternative to formal company closure would be to let the company go dormant.
This can be done if:
- the company has ceased trading
- no longer has an income stream
- does not undertake any business activities
A company that is dormant will still exist at Companies House with a need to file annual accounts and a confirmation statement.
GET IN TOUCH FOR HELP
For a free no obligation chat about any of the matters detailed above, please do get in touch for help. An expert will call you back or if you prefer exchange emails.
We can explore your situation and consider the best way to help you and your business needs. You can call us 020 3925 3613 or fill in the form below and will get back to you quickly. We Know Insolvency Inside Out.
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Disclaimer
This page is not legal advice and is not to be relied upon as such. This is provided for information purposes only. You should take independent advice on the facts of your case. No liability is accepted for reliance upon this post.
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