What is the cheapest way to close or liquidate a limited company quickly?
If you’re thinking about closing down your limited company, whether that’s because it’s under financial pressure or that it simply serves no further purpose, you may be wondering how you can liquidate or close the company in the quickest and cheapest way possible.
Cost is clearly an important factor, and you may be wondering is there are any cheap ways to close or liquidate a limited company quickly. Simply put - there are, but you need to ensure you are closing your company down in the most appropriate way for its situation, which unfortunately may not necessarily be the quickest or cheapest option.
Cheap and quick liquidation for solvent companies
Members’ Voluntary Liquidation (MVL)
If your company is solvent, a Members’ Voluntary Liquidation (MVL) may be the best option via which to close your company. An MVL is a solvent liquidation procedure that’s carried out by a licensed insolvency practitioner (IP). While there are professional fees attached to the process, there are also significant tax advantages in using an MVL. The potential tax savings that can be made can eclipse the cost of the MVL altogether, effectively making this a cheap liquidation option in the right circumstances.
Company dissolution
Another possible method of cheap company closure is company dissolution, which involves striking the company name from the Companies House register. This is a cheap option, costing £33 when you apply to strike off your company online. It's a relatively quick way to close your company too, as the process typically takes around three months so long as there are no objections made. Remember, company dissolution is only suitable for solvent companies, not those who are carrying debts it cannot afford to repay.
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Cheap and quick liquidation for insolvent companies
If your company is insolvent you may be tempted to close it down as quickly, and as cheaply as possible in order to bring the situation to an end. While this is understandable, it’s important to also consider your legal obligations as a director during this time of insolvency.
If you don’t adhere to the strict insolvency laws in the UK, you could face personal liability for your company’s debts and potential disqualification from acting as a director in the future.
The company dissolution process we mentioned earlier isn’t suitable for insolvent companies, and you should expect your creditors to make a formal objection to your strike off application if you attempt to go down this route. HMRC in particular, are known to do this quickly if they’re owed money – and you might be forced into compulsory liquidation as a result.
So how can you close down an insolvent company and is there a cheap and quick way to do this?
If your company is insolvent - meaning it has debts you simply cannot afford to pay back - liquidation is the only possible option. This can be a cheap option for directors as the liquidation fees will be paid for using the value of company assets rather than you or your fellow directors having to pay personally. If your company does not have sufficient assets to cover the fees, you may be required to pay the shortfall personally.
If you’re an employee of your company, you may also be able to claim statutory redundancy if you enter a CVL and meet certain conditions. This money could then be used to fund the CVL.
Concerned about National Living Wage and NI increases?
With the rates of both National Living Wage and employer National Insurance Contributions increasing in recent years, this additional cost of employing staff has added more pressure onto already squeezed cash flows. If you are worried about the impact this is having on your company's finances, talk to the experts at UK Liquidators. As licensed insolvency practitioners we can explain your options and help you plot a way forward. Call today on 0808 253 9878.
Seek professional advice on cheap and quick liquidation
Closing down a limited company in a cheap and quick way is possible, even when it has debts. You just need to take care to follow insolvency regulations and act quickly with the best interests of creditors in mind as soon as you know the company needs to be closed down.
The best way to do this is to seek professional insolvency help at the earliest signs of impending insolvency.
UK Liquidators is a partner-led company of licensed insolvency practitioners with more than 35 years’ experience. We’ll provide the reliable advice you need, and operate from a network of offices around the UK. Please contact one of the team to arrange a free same-day consultation.
Jonathan Munnery
Insolvency & Restructuring Expert | 20+ Years Insolvency Experience
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
IPA Member MABRP Member IPA Regulated
“ Directors often wait too long before seeking advice. The earlier you call, the more options remain available to you — and the better the outcome for everyone involved. ”
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
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