There are many reason you might want to close your company, depending on what they are, can affect the best way to bring your business to a close. Most options involve the services of an Insolvency Practitioner who is an person qualified and licensed to manage the closure of a company along with dealing with the businesses assets and creditors.

You can speak to one of our insolvency practitioners free and confidentially for advice on which procedure would work best for your company. You can then decide if you would like to use Lucas Johnson’s insolvency practitioners to carry out procedures on your behalf.

Alternatively you can read the explanations of various ways to close your company below and then decide if you wish to consult with an insolvency practitioner.

Company Dissolution

 A company dissolution is the simplest way of closing a solvent company (one which is able to pay all of its debts). However this approach requires that all creditors are paid in full, notifying HMRC of the closure, closing the businesses bank accounts and must cease trading for at least 3 months. Once all the requirements are met, the business can be officially closed by being struck off the Companies House register.

Members’ Voluntary Liquidation (MVL)

A Members Voluntary Liquidation (MVL) is a process owners and shareholders of a business can use to close a company down when it has assets or funds to return to shareholders – i.e. all of the debts of the company can be paid in full. This makes the process simpler than an insolvent liquidation where debts cannot be fully paid.  

Creditors’ Voluntary Liquidation (CVL)

A CVL (Creditors Voluntary Liquidation) is a process used to close a company at the end of its life when it is insolvent because it cannot pay its debts in full. This course of action will minimise creditor losses and show the director is acting responsibly by aiming to pay creditors as fairly as they can.

Compulsory liquidation

When creditors feel a company is unwilling or unable to pay its debts to them, they may take legal action in the form of a winding-up petition which can force the company into a compulsory liquidation. This means the business will be forced to close and have its assets sold with the proceeds from the sale being distributed amongst its creditors.

If your company is facing a winding-up petition, we can help you.

Administration

Administration allows a business to continue trading by selling the assets of the company to another organisation who continue to run the company. Unlike a liquidation, this means the business can continue to employ staff and provide for its customers. It can also generate more funds to pay creditors than a liquidation.

Pre Pack Administration

A pre-pack administration provides a way to deal with debt without giving up ownership of the company. An arrangement is made to sell the business’s assets to an administrator. The sale value of the assets is distributed to creditors. Then the administrator sells the assets – often back to the former company director. This allows the company to resolve its debt problems and then continue to be operate.

Free Help and Advice for Closing Your Company

Lucas Johnson provides free guidance for struggling companies. You can contact us to speak to one of our licenced and regulated insolvency practitioners for an explanation of closure or continuation options for your company.