My business has been gradually accumulating debt for a while now, but in the last year I’ve been unable to turn a profit at all. It is becoming a financial burden to keep investing in this when I know that realistically my effort will not be rewarded. The business is registered in the UK as a limited company. How would I go about formally closing the company with the least hassle?
If you have made your mind up that it is time to wind up your limited company, the first thing to consider is whether there are any other directors, members or shareholders who need to be a part of the decision making process. Without a resolution to wind up/dissolve a company, you cannot proceed. Also, it needs to be taken into consideration whether your company is solvent or insolvent. The process for closing a company in the UK depends on whether or not there are any outstanding debts which you have no hope of paying.
There is a process for winding up a limited company in the UK called Members Voluntary Liquidation. This is appropiate if you believe that the company's debts can be paid within a timeframe of 12 months after winding up begins, then this is the best solution. However, if your company is insolvent without hope of meeting that deadline, you would need to pursue a Creditors Voluntary Liquidation.
Once all assets, in either case, have been liquidated, the company can be struck from the register at Companies House. We would recommend that you speak with a licensed insolvency practitioner to discuss your financial circumstances before you do anything. You want to be sure you proceed in the proper manner so as not to slow down the process. You may believe your company is solvent, but if there is even the remotest possibility that it will not be possible to pay all creditors, you would need to switch midstream from an MVL to a CVL.
We are here seven days a week and it only takes a quick phone call to set up a free consultation. Closing a company in the UK is not what we like to see, but we can help you successfully cease trading and strike your company off the register. You are looking for the most effortless way to accomplish this and we can help.
23rd October 2017 The British Chambers of Commerce (BCC) has called on the government to freeze business rates in order to provide a boost to the competitiveness and productivity of UK companies.
12th October 2017 The impact of Brexit and the process of Britain departing from the European Union is likely to push up rates of insolvency among businesses throughout the UK.
11th October 2017 Financial losses and persistent problems with cash flows has led the civil engineering business Owen Pugh to enter administration.
2nd October 2017 Monarch Airlines has become insolvent and ceased trading as a result of “mounting cost pressures and increasingly competitive market conditions,” administrators have confirmed.
29th September 2017 The Bank of England governor Mark Carney has given a clear indication that he expects the base rate of interest in the UK to rise in the near future.
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