How Much Does It Cost to Close or Liquidate a Company in the UK?
Closing a limited company in the UK can cost anywhere from just £13 to over £6,000, depending on whether your business is solvent or insolvent and which closure method is chosen.
If you have decided to liquidate your company, particularly if the business is insolvent, you may understandably be worried about how you will be able to meet the costs involved in liquidation. The good news is that in many cases, directors don't need to pay these costs personally; instead, company assets typically cover the liquidation fees incurred.
This means that the money required to liquidate a company comes from selling business machinery, stock, collecting outstanding invoices, or using funds from the business bank account.
If you're worried about whether you can afford to close your company, you're not alone. At Real Business Rescue, we speak to directors every day who assume liquidation is going to be too expensive, but there are often more options to cover the cost than you may realise.
This guide explains exactly what you'll pay to close your company, how the fees are calculated, and what to do if you can't afford the costs upfront.
Quick comparison of all company closure options and their costs
Detailed breakdown of Creditors’ Voluntary Liquidation (CVL), Members’ Voluntary Liquidation (MVL), and strike off fees
What to do if you can't afford liquidation
How to close your company in the cheapest way
Frequently asked questions
Quick Comparison: Company Closure and Liquidation Costs at a Glance
Closure Method
Cost
Timeline
When to Use
Who Pays?
Strike-Off (Dissolution)
£13-£18
3 months
Solvent company with minimal debts or assets
Director pays fee upfront
Members' Voluntary Liquidation (MVL)
£1,500-£4,000
3-6 months
Solvent company with assets over £25k to distribute
Paid from company assets
Creditors' Voluntary Liquidation (CVL)
£4,000-£6,000+
6-12 months
Insolvent company with unmanageable debts
Usually paid from company assets
Compulsory Liquidation
£2,500 (creditor pays)
3-12 months
Forced by creditors via court order
Creditor pays with their fees repaid from the company’s assets
If your company is solvent with few assets, strike-off costs just £13-£18 depending on the method of application.
If you have substantial assets to distribute to shareholders, a Members’ Voluntary Liquidation (MVL) costs £1,500-£4,000 but the potential tax savings involved often make this an extremely cost-effective option.
For insolvent companies, a CVL typically costs £4,000-£6,000, with the fees usually paid from the sale of company assets.
How Much Does It Cost to Close an Insolvent Company?
If your company is insolvent – meaning it cannot pay its debts when they fall due – you'll need to use a formal insolvency procedure to close it. In this situation, you have two options: voluntarily liquidate the company via a Creditors’ Voluntary Liquidation (CVL) or wait to be forced into compulsory liquidation by a creditor.
A CVL is the most common way to close an insolvent limited company. It's a voluntary process where you, as director, choose to liquidate the company and appoint your preferred insolvency practitioner.
As a ballpark figure, you can expect to pay between £4,000 and £6,000 to liquidate an insolvent company with relatively few assets, minimal debtors and no ongoing legal action against it. This figure will rise for more complex cases where there are many creditors, high-value assets requiring specialist valuation, overseas assets, or missing records.
In many cases the fee will be paid for using company assets so the director will not have to personally pay anything to liquidate their company as long as there are sufficient company assets to cover the cost.
Selling these assets (such as vehicles, equipment, stock, property)
Collecting any outstanding invoices owed to the company
Using these funds to pay the liquidation costs first
Using any remaining funds to repay creditors as far as possible
It is important to note here that if you have an overdrawn directors’ loan account - meaning you've taken more out of the company that isn’t classed as salary or dividends than you've put in – this is treated as an asset of the company. As part of the liquidation process, the appointed insolvency practitioner will expect any overdrawn directors’ loan to be repaid to the company. You can learn more about overdrawn directors’ loan accounts and how they are treated during company insolvency by reading our comprehensive Overdrawn Directors’ Loan Account guide here.
“Called for help with closing non-trading companies and Chelsea advised me on what to do and instead of taking advantage as others would by taking on the case and charging loads. She gave me a solution that would cost £20. Very pleased with the service and thankful for Chelsea’s advice.”
If your company can pay all its debts in full, you have two main options when it comes to closing the business down. You can strike off the company at Companies House or place the company into a formal liquidation process via a Members' Voluntary Liquidation (MVL). The right choice ultimately comes down to the value of the company's assets which are to be distributed to shareholders.
Strike Off / Voluntary Dissolution Costs: £13-£18
Company strike off is the cheapest and quickest way to bring an end to an unwanted business, however, it is not suitable for all limited companies looking to close. Strike off is designed as a cheap and quick way to close a solvent company with minimal debts, assets, or trading history. You should only attempt to strike off your company if it meets the criteria. If you owe money to creditors and try to strike off, there is a high likelihood they will object and your application will fail.
You can apply to strike off your company directly at Companies House by filling in a DS01 form and paying the associated fee. The cost is currently £13 for online applications and £18if you complete the form by hand and send to Companies House in the post.
It should be noted here that if you're distributing assets worth over £25,000 to shareholders, opting for the strike off method means these distributions will attract income tax rather than capital gains tax. This could result in a significantly higher tax bill compared to using an MVL (see below).
An MVL a formal insolvency process designed for solvent companies holding assets of more than £25,000 that want to close in a tax-efficient manner.
The cost of an MVL will vary depending on the complexity of the liquidation. This includes factors such as the value of company assets to be distributed, the number of shareholders, and whether the company’s accounts and filings are up to date.
The main benefit of an MVL is that it allows the shareholders to extract the value tied up in the business as cash in a cost-effective and tax-efficient manner. This is because the funds distributed via the MVL process are taxed as capital gains and not as income. Furthermore, shareholders may be able to take advantage of Business Asset Disposal Relief to lower the rate of CGT levied on distributions following an MVL. You can learn more by viewing our guide to Business Asset Disposal Relief here.
If a creditor forces your company into liquidation via a winding-up petition, you won't pay the liquidation costs directly. Instead, the fees involved in petitioning the courts to wind up a company, which is typically in the range of £3,500 – £4,000, are paid for by the petitioning creditors.
While this is a costly route for a creditor to take, some will choose to do this if they believe the company has sufficient assets to allow them to recover these costs once the company has been liquidated.
While it might seem appealing to let creditors "pay" for your liquidation, this approach carries greater risks than opting to voluntarily liquidate your company. You can read more about compulsory liquidation and the implications for directors in our dedicated Compulsory Liquidation guide.
Looking to close your company?
Whether your company is solvent or insolvent, there are a number of ways to bring your business to a close. Speak to a member of the Real Business Rescue team today to understand your options. The team are available now - 0800 644 6080
What If I Can't Afford to Liquidate My Company?
We regularly speak to directors who know their company is insolvent and need to place it into liquidation but worry that they can't afford to do this.
If you are unsure whether you will be able to afford the costs of liquidation, here are some of the most common payment options our licensed insolvency practitioners explore with directors who contact us:
1. Using Company Assets to Fund Liquidation
Using the value of company assets to cover the cost of the liquidation fees is the most common solution. Even if you don’t think your company has many assets, it is often the case that you have more than you realise. Company assets that can be used to fund liquidation include cash held in your business bank account, outstanding customer invoices owed to your company, stock and inventory, equipment and vehicles.
2. Using Director Redundancy to Pay for Liquidation
If you've been on the company payroll for at least 2 years, you may be entitled to statutory director redundancy pay when the company enters liquidation. In many cases this can be enough to cover the liquidation costs. Your appointed insolvency practitioner can explain your eligibility for director redundancy if you believe you may be eligible for it.
3. Negotiating Payment Terms with Your IP
If your company has insufficient assets and you don't qualify for redundancy, speak to your insolvency practitioner about possible payment options. These may include paying the liquidation fee in instalments over an agreed period of time, paying partially in company assets and partially in cash, or agreeing a set maximum fee for the liquidation.
4. Using Personal Funds
If none of the above options work, you may need to contribute personal funds from savings, selling personal assets, or borrowing money. While this is far from ideal, continuing to trade while insolvent puts you at severe risk of wrongful trading allegations which could lead to personal liability for company debts or even director disqualification.
How can I liquidate my company quickly and cheaply?
Unfortunately, liquidation does come with a cost attached to it. While you can't avoid liquidation costs entirely, you can ensure you're getting the best value for money and help to avoid unwanted surprises further down the line.
As the UK’s number one for liquidation, we know what you should be looking for (and what you should be wary of) when appointing an insolvency practitioner to liquidate your company. Here are our top tips for liquidating your company for the best price possible:
1. Understand your Liquidation Quote
Ensure your insolvency practitioner can answer the following questions:
Not all insolvency firms are made equal. At Real Business Rescue, we have a nationwide network of almost 100 fully licensed insolvency practitioners handling thousands of liquidations each year.
We regularly speak to directors who've had concerning experiences with other firms. Based on what our insolvency practitioners see daily, they've identified several common red flags that directors should be wary of when choosing an insolvency practitioner:
CVL quotes under £2,500 (there are almost certainly hidden costs)
Upfront payments to introducers who aren't insolvency practitioners themselves
Pressure to sign on the dotted line immediately
Vague pricing and dismissive of your concerns over outstanding overdrawn directors’ loans
No clear explanation of what's included for the price
3. Act Early
The sooner you seek advice, the more options you'll have. Waiting until you're served with a winding-up petition dramatically limits your options and increases costs.
How Real Business Rescue can help
If you're considering closing your company via liquidation, understanding the full costs upfront removes uncertainty and allows you to plan properly.
What we offer:
Free, no-obligation initial consultation
Partner-led service from licensed insolvency practitioners
We handle more corporate insolvency appointments than any other UK firm, helping thousands of directors navigate company closure every year. Whether you're concerned about affordability, unsure which closure method suits your situation, or if you simply want to understand your options and the costs involved, our team is here to help.
Shaun is a Partner Real Business Rescue specialising in supporting SME directors in financial distress and helping them understand their options. Shaun has over 30 years' experience in guiding directors through CVL, MVL, and business recovery processes. Shaun holds the Certificate of Proficiency in Insolvency (CPI).
Partner, Real Business Rescue
Frequently Asked Questions
Can I negotiate liquidation fees?
While liquidation always comes with a cost, there are ways you can make the process more affordable.
Negotiate payment terms (such as paying in instalments)
Request a fee cap for fixed-fee arrangements
Shop around for competitive quotes
However, be aware that extremely low fees often indicate poor service or hidden costs. Focus on value rather than just the cheapest price.
How long does liquidation take?
MVL: 3-6 months typically
CVL: 6-12 months on average
Compulsory liquidation: 3-12 months depending on complexity
Simple cases can be completed faster; complex cases with property or ongoing legal action can take longer.
What if the company has absolutely no money or assets?
You have a few options:
Pay for liquidation personally if you can afford to do so
Check your eligibility for director redundancy pay. Co-directors may also have their own claim for redundancy
Explore any potential payment terms with the insolvency practitioner that could make the process more affordable
Can I choose my own insolvency practitioner to act as liquidator?
Yes, in a CVL or MVL, you choose and appoint your preferred licensed insolvency practitioner. In compulsory liquidation, the court appoints their own choice of Official Receiver.
What's the difference between the insolvency practitioner’s fees and disbursements?
Insolvency Practitioner fees - Payment for the insolvency practitioner’s time and expertise
Disbursements – These include filings and notifications as required by law (Gazette advertisements, bonds, searches, postage)
Both should be clearly itemised in your quote.
What happens to overdrawn director's loans?
If you've withdrawn more from the company than you've put in (this will show as an overdrawn director's loan account), this is treated as a company asset. The liquidator will:
Calculate the overdrawn amount
Request you repay it
Use these funds toward liquidation costs and creditor distributions
You may be able to negotiate paying this back in instalments or offset it against liquidation fees depending on your circumstances and ability to repay.
Still unsure whether liquidation is right for your company? Don't worry, the experts at Real Business Rescue are here to help. Our licensed insolvency practitioners will take the time to understand the problems your company is facing before recommending the best course of action going forward based on your own unique circumstances.
We provide free confidential advice with absolutely no obligation. Our expert and non-judgemental team are ready to assist directors and stakeholders today.
60 Second Test
Understand your company's position and learn more about the options available
This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our privacy policy
