Close my Restaurant Business
The restaurant sector has to deal with an assortment of problems, including rising payroll costs, higher energy bills, and an increased cost of ingredients, causing severe financial difficulties for some restaurant businesses.
So, if insolvency is the reason for closing your restaurant, we can help you liquidate and close your company down in a way that fulfils your legal duties as a director and protects your creditors from unnecessary financial loss.
If your reason for closing your restaurant is more positive, however – maybe it is solvent and you want to retire or move on to something new – you can enter a different form of liquidation or follow an informal closure route called voluntary dissolution.
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How do I liquidate my restaurant?
Liquidation is a legal process that results in business closure. It involves appointing a licensed insolvency practitioner (IP) but the correct liquidation procedure depends on whether your business is solvent or insolvent.
Liquidate my insolvent restaurant
If your restaurant business is insolvent, the best way forward is to enter Creditors’ Voluntary Liquidation (CVL). This offers you the opportunity to close the business according to statutory requirements.
In this instance, your business assets are sold at a liquidation auction and the insolvency practitioner uses the funds to repay creditors. Any debts that remain are written off and the company then closes down.
The only other alternative to Creditors’ Voluntary Liquidation is to wait for a creditor to forcibly wind up your restaurant. This should be avoided, however, as it has serious ramifications for you as a director and could lead to personal liability for your business debts.
Liquidate my solvent restaurant
If your business can pay its bills as they fall due and the value of its assets exceeds that of its liabilities, you can close it by entering Members’ Voluntary Liquidation (MVL). The board must pass a resolution and then appoint a licensed insolvency practitioner.
The IP liquidates the restaurant’s assets, winds up your business affairs, and removes the company name from the official register, after which it ceases to exist. This is a highly tax-efficient procedure if your business has £25,000 or more in retained profits as distributions are subject to Capital Gains Tax (CGT) rather than income or dividend tax.
How do I close my restaurant via company dissolution?
Company dissolution is an unofficial procedure that you and any fellow directors administer yourselves. It may be an appropriate option if your restaurant business has retained profits below £25,000.
To be eligible, you must not trade or change the company name for three months, and not be subject to any arrangements with your creditors. When you have wound down your business affairs you close your company and it is removed from the Companies House register.
Company Closure provides free advice on liquidation and closure options for restaurant businesses. We have extensive experience of helping directors in the restaurant industry so please get in touch with one of the team to arrange a free same-day consultation.
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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