Close a Limited Company

How do I close a Limited Company? We can help with this

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Close a Limited Company

"Whatever the reason, if you’re looking to close your company the best thing you can do is get in touch with our team first"

There are many reasons why a Director may want to close their Limited Company, but whatever the situation, be it the company can no longer pay its debts, retirement, or becoming a sole trader, there are usually two main routes to closing a company - Dissolution/Strike off or Liquidation.

Our team at The Directors Helpline can help you understand all options available and, if needed, we can help you to close your company the right way. We hold your hand throughout the entire process and are here to support YOU.

Frequently Asked Questions

Can I start a new business if I close?

Yes, usually you can start a new business after you close your company.

However, in some circumstances there may be problems when a director has committed any wrongdoing, hasn't followed the correct procedures, or has previously been disqualified.

It's best to seek advice before entering into a formal process to understand how to start a new business if you close.

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How do I close a company that has never traded, or is no longer trading?

The process of closing a company that has never traded, or is no longer trading, is relatively simple, as long as:

there are no debts
no impending legal action
and it hasn't traded ever or within the last 3 months

You will need to take the following steps:

All directors and shareholders must be in agreement
Complete a DS01 form along with the £10 filing fee
Submit the form to Companies House
If there are no objections made, your company will be struck off the register and cease to exist

What does an Insolvency Practitioner do?

An insolvency practitioner is someone who is licensed and authorised to act in relation to an insolvent individual, partnership or company.

They are required to process a corporate liquidation and have several duties in their position, some being:

Distributing the realised assets and surplus funds to the appropriate parties.
Investigating any wrongdoing that may have taken place at any point throughout the life of the company.
Creating a Statement of Affairs document for the creditors. This is a financial statement explaining the business’ position in some detail.

All liquidation procedures must involve a licensed insolvency practitioner and they will manage the affairs of the process from start to finish.

How to close a Limited Company

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No

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How to close a limited company with outstanding debts

If you’re looking to close a company with outstanding debts (such as HMRC arrears or a Bounce Back Loan), then a Creditors Voluntary Liquidation (CVL) may be the most appropriate route for you. This is by far the most common way that directors choose as they have an element of control over the process and who they engage as the Insolvency Practitioner, plus they are doing the responsible duty as a director of the company.

Not addressing the company's situation could lead to it being forced into a Compulsory Liquidation by one of your creditors, which is not advised as it can lead to some serious personal consequences for you, the director.

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How to close a limited company with debts

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Closing a limited company with no debts

If your Limited Company has no outstanding debts or substantial assets there are two ways you could close it – get it struck off the register from companies house through a dissolution, or by entering a Member’s Voluntary Liquidation.

A dissolution is a relatively simple and inexpensive process and usually takes up to 2 months. A company director can request that their company is struck off the register by submitting a DS01 form to Companies House and paying the appropriate administration fee.

If your company is solvent and has over £25,000 left once you pay off all your debts, you may choose to enter a Members’ Voluntary Liquidation (MVL) as this may be a more tax efficient way of taking your income from the business.

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Frequently Asked Questions

Why do businesses enter liquidation?

There are various reasons why a company may choose to enter liquidation, be it solvent or insolvent.

Solvent companies can afford to pay off any debt within the business. They may choose to enter a Members Voluntary Liquidation because they are retiring, or no longer intend to run the company.

Insolvent companies either cannot afford to pay off any debts within the business, or their liabilities outweigh their assets. They should choose to enter a Creditors Voluntary Liquidation to close the company. All unsecured debts are written off, such as Bounce Back Loans and HMRC debt.

There isn't a one-size-fits-all when it comes to company liquidation which is why it's always best to seek advice before entering any formal process.

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

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Can I close with a Bounce Back Loan?

Yes, but the only way to do this is through Liquidation. However, it is important you understand if there would be any personal implications for you, the Director.

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

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How much does it cost to liquidate?

Insolvency fees range from £4k-£6k.

However, this depends on the firm you use, and the complexity of the case. There can also be hidden fees or personal implications which weren't addressed beforehand.

The Directors Helpline will assess this before entering liquidation.

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

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What debts are written off in a liquidation?

During the process of liquidation, the liquidator sells the company assets to generate funds for the creditors. Once all creditors have been repaid (as far as funds allow), any remaining debts will be written off.

Can I liquidate a company for free?

In order to correctly liquidate a company, you need a Licensed Insolvency Practitioner, which requires a fee. Therefore, any advertisements for free company liquidation are not true.

Our guidance is completely free for you to help you understand all your options and any potential implications before you decide to enter liquidation.

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

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What happens if I can't afford to liquidate?

If your company cannot pay its debts, is insolvent, and you need to close it, then liquidating it may be the most suitable option.

However, if you can't afford a Creditors Voluntary Liquidation, there are a few things you could consider:

Sale of company assets
Personally financing some or all of the fees
Instalment plan with the liquidator
Director redundancy pay

"If your company does need to close, we hold your hand throughout the process..." Jonathan Cooper, Founder and Director

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

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First name *

Last name *

Email *

Phone number *

Company name *

Is the business a Ltd company? *

Yes
No

Have you taken a Bounce Back Loan? *

Yes
No

Does the business have VAT/HMRC arrears? *

Yes
No

What is the total amount of debt? *

When is the best time to call you? *

How did you hear about us?

Message

Consent for storing submitted data *

I understand how my data will be used

Recaptcha *

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