If you decide to close a company, you will need to satisfy a number of requirements, and the dissolution process will depend on whether your business is solvent or insolvent – i.e., does the company have enough money to pay its bills?
If your company is able to pay its bills, it is solvent and there are two options available to you:
If your company cannot pay its bills, it is insolvent. To close a company that is insolvent you must use the creditors’ voluntary liquidation process.
If your limited company is able to pay all of its debts, the easiest way to wind up the business is to strike it off the register at Companies House. To do so, your company must meet all of the following conditions:
Directors are legally responsible for overseeing the proper closure of the business. Their duties in such circumstances are as follows:
If there are no objections to the application, Companies House will strike your company off the register within 3 months.
A members’ voluntary liquidation is another process of winding up a solvent company. It involves using company assets to pay all money owed to creditors. If there is any money left over after the bills have been paid, the surplus income can be distributed amongst the shareholders. To close a company in this way, the following is necessary:
If your company cannot pay its bills, you will need to implement a creditors’ voluntary liquidation . The following steps should be carried out in order to initiate the process:
Within 15 days, the resolution to voluntarily wind up the company should be filed with Companies House. The directors are legally responsible for ensuring the interests of creditors are protected ahead of the interests of the company and its shareholders.