Am I eligible to voluntarily strike off my business?
There are several prerequisites to dissolving your business voluntarily, including:
- Not trading or changing the company name for three months
- Having no outstanding debts or legal claims against the company
- Not being involved in any insolvency procedures
- All assets being distributed to shareholders
- Company accounts and returns being up-to-date
You must inform all stakeholders of your intention to strike off your company from the register, and a notice is also placed in the Gazette. If there are no objections the application will be successful and the business closes down.
Why is voluntary dissolution one of the cheapest ways to close a company?
Voluntary dissolution is a director-led process that has no requirement for professional involvement. This contrasts with formal liquidation procedures that must be conducted by licensed insolvency practitioners (IPs).
Directors undertake all the steps to wind down their business, from closing their payroll to distributing company assets, and the application process can be carried out online if required.
Why is voluntary dissolution one of the cheapest ways to close a company?
Voluntary dissolution is a director-led process that has no requirement for professional involvement. This contrasts with formal liquidation procedures that must be conducted by licensed insolvency practitioners (IPs).
Directors undertake all the steps to wind down their business, from closing their payroll to distributing company assets, and the application process can be carried out online if required.
Don’t Fall Foul of Unqualified AdvicePotential issues with voluntary dissolution
One issue that can emerge when taking this route is unexpected insolvency. You may believe that your company can repay all of its debts but this may not actually be the case, especially if contingent liabilities exist – such as employee claims against the company.
This can tip a seemingly solvent business into insolvency if a claim is successful, making voluntary strike off an unsuitable route, even though it’s cost-effective. It’s imperative, therefore, to seek professional confirmation of the financial status of your business before taking any steps towards business closure.
Is there a cheap way to close my business with debts?
If you want to close your company but it has debts, it’s worth knowing that a formal liquidation process called Creditors’ Voluntary Liquidation is available. If you believe that you won’t be able to afford the professional fees involved you may be able to fund it via the sale of assets.
Alternatively, some directors can pay for a CVL by claiming director redundancy pay. This and other statutory redundancy payments may be available to you if you’ve worked under a contract of employment for two years or more.
Company Closure can offer professional guidance on director redundancy and advise you on the cheapest and most suitable method of closing your business. Please get in touch with our expert team to arrange a free consultation – we operate a nationwide network of offices.
Need to speak to someone?
With multiple offices across the UK and a vastly experienced team of business closure experts, you are never far away from the advice you need. Our Licensed insolvency practitioners provide free consultations to all directors and shareholders, and can quickly ascertain which closure method is best for your business.
We are licensed by recognised professional bodies and have helped thousands of directors over many years. Contact us today for your free company closure consultation.
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