Close my Professional Services Firm
In a constantly changing market, attracting and retaining customers and maintaining the customer-centric relationships required in this sector is a key issue for professional services firms.
Similarly, given the dependence on human assets – the knowledge of experts and their ability to impart it to clients – talent retention can also prove to be an ongoing obstacle to success.
The typical complexity of projects undertaken in the professional services sector can create difficulties with resource planning and ensuring each project can be completed without too much of a strain on working capital.
This has led some professional services firms towards insolvency and the threat of liquidation, which is a legal procedure that protects a company’s creditors from unnecessary financial loss.
Liquidation is also available for professional services firms that are solvent. It may be used when a director wishes to retire, for example, and is highly tax-efficient under the right circumstances. A further closure option for solvent businesses is company dissolution.
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How do I liquidate my professional services company?
Insolvent liquidation
If you need to close down your company with debts it’s important to act quickly to protect your creditors. If a creditor presents a winding-up petition in court, it may result in compulsory liquidation and the threat of personal liability for some of the business’s debts.
Creditors’ Voluntary Liquidation (CVL) allows you to meet your legal obligations as a company director and is conducted by a licensed insolvency practitioner (IP) so it also reassures you that all statutory requirements are being met.
Assets, such as computer equipment and fixtures and fittings, are sold at a liquidation auction and creditors repaid with the funds generated. Not all debts will be paid, however, and any remaining are written off before the company closes down.
Solvent liquidation
Solvent companies with around £25,000 or more in distributable profits may find Members’ Voluntary Liquidation (MVL) the best procedure to follow. This is because distributions are taxed as capital rather than income.
Any assets held by the business can be transferred out of company ownership or sold by the liquidator at auction and the monies distributed amongst shareholders before the business closes.
What is company dissolution for professional services firms?
Company dissolution, also known as company strike-off, is an inexpensive way to close a firm with less than £25,000 in retained profits. You conduct the process yourself as a director and wind down your business’s affairs over time.
Before you start this process you must not trade your business for three months or change the company name. We should also reiterate that the business must be solvent, as taking an insolvent company along this route can lead to serious repercussions for directors.
Company Closure are liquidation and closure specialists and can provide guidance to ensure you follow the correct procedure if you need to close a solvent or insolvent professional services firm. We offer free advice and have extensive experience in helping directors in this important sector.
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At Company Closure we have a nationwide team of licensed insolvency practitioners and company closure experts here to help you understand your options. Whether your company is solvent or insolvent, there is a closure method out there to suit you.
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