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Request a meeting...Updated: 20th March 2021
There are a number of avenues that you could follow if you wish to close a solvent company. However, the most appropriate one for you depends on a number of factors, particularly concerning the company’s asset status and tax planning arrangements. Two of the most common methods are either via dissolution of the company or through a Members’ Voluntary Liquidation (MVL).
The first step when closing a company is to establish whether or not it can be legally classed as solvent. To be deemed solvent a company must be able to do the following within 12 months of closing:
The value of the company’s assets must also exceed the total of its balance sheet liabilities. If your company meets all of these requirements it can then be closed either via dissolution or via an MVL.
This route is often chosen for companies who have little or no assets in the business. It is also often preferable for companies which are no longer active and are unlikely to be required again in the future. However, if the company may need to be resurrected in the future then keeping the company dormant may be a preferable option. Companies can be kept dormant indefinitely providing basic reporting requirements are maintained.
A company can be dissolved and thus struck off the register held at Companies House only if it hasn’t traded, sold off any stock, or changed its name in the last three months.
There are a number of features to be taken into account when considering dissolving a company:
An MVL must be undertaken by a licenced Insolvency Practitioner (IP) and is generally suitable for companies that have more complex structures or assets over £25,000. The appointed IP will work to realise and then distribute these assets to the company’s members.
To engage in an MVL the following conditions must be met:
There are a number of important features to be taken into account when considering closing a company via an MVL:
If you are looking to close your company then we would recommend getting professional advice as to which would be the best option for you. Begbies Traynor Group provides practical advice and closure services to company directors. We will take the time to fully understand your company and your motivations for closing it. Contact us to find out more or to arrange a free meeting with one of our regional offices.
Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...Call our Confidential Advice Line. Calls to this number are free of charge.
Call us now...We invite you to come and discuss your enquiry with us at your convenience.
Request a meeting...