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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.
Concerned about the National Insurance increase?
For the 2024-25 tax year, the rate of employer National Insurance increases from 13.8% to 15% adding yet more pressure onto already squeezed cash flows. If you are worried about the impact this could have 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 0800 063 9262.
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.
Liquidation Portal
For Company Directors
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?
Creditors’ Voluntary Liquidation (CVL)
The best way to close down a company with debts is to enter Creditors’ Voluntary Liquidation.
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.
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
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.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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