Close my Retail Business
The retail sector has been seriously challenged over recent years, with the coronavirus pandemic closing shops and high commercial rents proving too onerous for even the most familiar and long-established retail names.
If you operate in the retail trade and your business has financially declined to the point of insolvency, you need to consider entering an official procedure called Creditors’ Voluntary Liquidation (CVL), which closes it down according to statutory requirements.
Another form of liquidation is also available if you want to close and your business has no debts. Members’ Voluntary Liquidation (MVL) offers tax efficiency if your retained profits are £25,000 or more. If not, an unofficial route to business closure is company strike-off.
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How do I liquidate my retail business?
Liquidation is a formal way to close your business, whether or not it has debts, and is conducted by a licensed insolvency practitioner (IP).
Liquidate my solvent retail business
Members’ Voluntary Liquidation is highly tax efficient and can help you extract the highest amounts from your retail business if you have distributable profits of around £25,000 or more. Initially, 75% or more of shareholders must vote in favour of entering MVL and pass a resolution.
Once a licensed insolvency practitioner is appointed, company assets are transferred to new ownership or sold and the profits are distributed. The company is removed from the register at Companies House and closes down permanently.
Liquidate my insolvent retail business
If your business has outstanding debts that it cannot afford to repay, Creditors’ Voluntary Liquidation allows you to close it down whilst meeting your legal obligations as a company director.
Business assets are processed by the appointed IP via a liquidation auction, but company creditors receive the proceeds rather than the shareholders. If any debts are outstanding following this, they are written off and the company is officially closed.
One of the benefits of closing your company via liquidation is receiving professional support. This ensures that you do not fall foul of any UK laws, which is particularly important in the case of insolvent companies.
If your company can pay its debt but has lower profits to distribute, however, company dissolution offers you an inexpensive way to close your business.
How do I close my retail business via company dissolution?
To be eligible for company dissolution, which is an unofficial closure option also known as company strike-off, you cannot trade for three months or change the name of your company.
You and any fellow directors wind down your business affairs, including closing your payroll scheme and selling any assets, and then you apply to Companies House to close the business down.
A key element of company dissolution is the declaration of solvency that you must make beforehand. It is important to be certain that no debts remain as if the business is later found to be insolvent you would need to enter CVL instead, and this would trigger an investigation by the liquidator.
Company Closure can provide the professional guidance you need when closing your retail business. Please get in touch with one of the team to arrange a free, same-day consultation – we operate a nationwide network of offices.
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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