Close my Transport Company
The UK’s transport sector continues to face significant operational and financial challenges with the soaring cost of fuel and ongoing fleet management costs creating severe cash flow issues for some firms.
The problem is that a decline into financial distress and insolvency can quickly place the business at threat of liquidation. Insolvent liquidation occurs when a company cannot pay its bills as they become due and is a situation that must be dealt with promptly by directors.
Formal liquidation processes can be used for insolvent and solvent businesses, however, and in both cases are carried out by a licensed insolvency practitioner. An unofficial way to close a transport business is company dissolution, so let’s look at these procedures in more detail.
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How do I liquidate my transport sector business?
Creditors’ Voluntary Liquidation (CVL) for insolvent transport companies
If your transport company has entered insolvency and cannot be rescued, Creditors’ Voluntary Liquidation provides a closure route that places creditor interests first as required by law.
During CVL the appointed liquidator deals with creditor claims and sells business assets to generate funds for unsecured creditors. Any debts outstanding after the monies have been used up are written off and the company closes down permanently.
When an insolvent liquidation takes place the liquidator must investigate the reasons behind the company’s failure to establish whether any wrongdoing has occurred. As you’ve voluntarily placed your company into liquidation you reduce the likelihood of any wrongful trading allegations.
Members’ Voluntary Liquidation (MVL) for solvent transport firms
If you want to close your solvent business for any reason, Members’ Voluntary Liquidation may be the most suitable procedure to follow. It allows you to extract maximum profits from the business as distributions are subject to Capital Gains Tax (CGT).
You may also be able to lower your tax liability further if you’re eligible to claim Business Asset Disposal Relief (BADR). Once the company’s assets have been processed by the liquidator, either transferring ownership away from the business or selling the assets at auction, the profits are distributed amongst members.
Can I use company dissolution to close my transport firm?
How does company dissolution work?
Company dissolution ultimately removes your company name from the official register and closes it down. Before this, you must wind down your business, including closing your payroll and bringing any outstanding tax returns or payments up to date.
The company must be able to repay all of its creditors within 12 months to be eligible for this process, which is an inexpensive closure option for firms with less than £25,000 of profits to distribute.
As it’s an unofficial procedure you deal with your business assets yourself, either selling them or transferring ownership as appropriate. It should be noted, however, that ensuring the business is solvent is the key issue initially.
Our expert team at Company Closure are available to provide more tailored advice for closing your company. We work extensively with directors in the transport sector and will ensure your business is closed down using the correct process.
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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