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What is dissolution?

Dissoluton means the end of a company as a legal entity. A director can voluntarily dissolve their company on the pre-conditions that:

  • The company hasn’t traded or sold off stock in the last 3 months
  • The company hasn’t changed names in the last 3 months
  • The company isn’t threatened with liquidation and has no agreements in place with creditors, such as a Company Voluntary Arrangement (CVA).

Dissolution is a useful solution for closing a company if it has served its purpose, is no longer active, and unlikely to be required in the future (often if the director chooses to retire.)

You can only dissolve a company if it is solvent.

Not always the best option…

It must not however be used as a way to close down a company in the hope of writing off debts.

It is an offence to make a dishonest application – you can face a fine and possible prosecution.

We’ve heard from many directors who have experienced problems when trying to dissolve their company. In most cases the company had ceased trading, but still owed money to the Revenue. This meant the dissolution was rejected.

Creditors' Voluntary Liquidations from £1,995

If the company has debts that it cannot pay (ie. it is insolvent) then the best option is likely to be to formally liquidate the company – with a Creditors’ Voluntary Liquidation.

A CVL will:

  • deal with the business debts
  • ensure the director’s legal obligations are met
  • give the director peace of mind

If the circumstances are right, a company dissolution can be the best solution. However, if the company still has a creditor, it should not be used as a ‘sneaky’ way to write off the debts and avoid paying. Our affordable CVL option will ensure everything is dealt with correctly.

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Affordable

Basic CVLs just £1,995 (all inc.)
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Peace of mind

Ensure nothing comes back to haunt you
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Meet legal obligations

Do things correctly and legally
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Acknowledge duties

Acknowledge your duties to the creditor
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Nationwide

No need for face to face meetings
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Friendly

Professional service
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Free advice

Get your free, confidential consultation
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Ideal alternative

to a company dissolution
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