Close my Care Home Business
Shortages of skilled staff, rising operational costs, and rent increases are just three challenges currently facing the care home sector. It is understandable, then, that this constant pressure on finances sends some care homes into insolvency.
If your care home business is experiencing unrelenting financial decline, we can help you close it down and comply with your legal duties as a director. If it is insolvent it needs to be closed via a process called Creditors’ Voluntary Liquidation (CVL).
Liquidation is also available for solvent care home businesses, however, and the process in this instance is Members’ Voluntary Liquidation (MVL). A further procedure called voluntary strike-off can be used for businesses with low levels of retained profits and no outstanding debts.
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How do I liquidate my care home?
Liquidate my solvent care home: Members’ Voluntary Liquidation (MVL)
Members’ Voluntary Liquidation involves a meeting of company members to vote on whether to enter MVL. If a sufficient number vote in favour, a resolution is passed to that effect. You must also appoint a licensed insolvency practitioner (IP) to administer the liquidation process.
Your care home business assets are processed by the IP – some may be purchased by yourself or other directors, for example, or sold to third parties. The proceeds then form part of your distributable profits once all liabilities have been paid.
MVL is worth considering if your retained profits are £25,000 or more, as distributions are subject to Capital Gains Tax (CGT). Your liability may be further lowered to an effective rate of 10% if you are eligible to claim Business Asset Disposal Relief (BADR).
Liquidate my insolvent care home: Creditors’ Voluntary Liquidation (CVL)
Creditors’ Voluntary Liquidation must also be conducted by a licensed IP. Part of their role in this instance is to investigate the reasons behind the company’s failure and submit a report to the Secretary of State.
By voluntarily placing your care home into liquidation, however, you reduce the chances of misconduct or wrongdoing accusations being made against you as you have prioritised your creditors’ interests. At the end of the liquidation, your company is removed from the official register at Companies House and permanently closes.
How do I close my care home business via company dissolution?
Businesses that have retained profits of less than £25,000 can close down via company dissolution. This involves you and any other directors winding down your care home yourselves, and applying to Companies House to close it.
As no professional input is required in this process, it is very important to check that your care home business is, in fact, solvent. If not, and you follow this route, unpaid creditors can apply to have your business restored to the register.
Our team at Company Closure can provide more information on this, and guide you towards the best way to close your care home. We offer free, same-day consultations, and work from offices around the country. Please get in touch to find out more.
25,000+ Company Directors Supported – Partner Led Service
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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