If you’ve decided to close your company then there are several ways to approach it.
Which one is right for you mainly depends on whether your business is solvent or not.
If it is — that is it can reasonably pay off its debts within a 12 month period — then a Members Voluntary Liquidation (MVL) or Dissolution could be the preferred options for closure.
If there’s at least £25,000 left over after creditors have been paid in full then an MVL would be the best way to close the business.
During the process of this type of liquidation, the remaining cash is distributed to shareholders and the company removed from the Companies House register. MVLs also allow shareholders to access Entrepreneurs’ Relief so it’s a tax efficient way of closing a limited company too.
If there’s less than £25,000 after creditors have been paid then dissolution or striking-off is a better choice.
A company can still be dissolved even if it owes creditors, although it must cease all activity including trading for three months previously, and creditors have to be informed and can contest the closure within this timeframe.
If the company is insolvent then don’t worry, it can still be closed and liquidated, but the methodology will be different.
A Creditors Voluntary Liquidation (CVL) would be used, or there could even be a compulsory liquidation through a winding up petition.
A CVL or insolvent liquidation means that the business effectively closes and is handed over to a liquidator because it can’t trade profitably or its liabilities are greater than its assets.
What we’d do as liquidators then would be to handle all creditors enquiries, look into and agree their claims if necessary, and look to raise the money from the company’s assets to pay them.
A winding-up petition, otherwise known as compulsory liquidation, is when a creditor has had enough and wants to get some money back by closing the company and forcing the sale of its assets. If this isn’t serious enough, a winding-up petition could see a business have it’s lease terminated and bank account frozen as a result.
Whatever your business’s situation, we’ll be able to take care of you and the closure as quickly, fairly and as stress free as we can make it.