Running your own business can be an extremely rewarding and fulfilling career path. However, it can also be extremely challenging and stressful.
Whether you’re a freelance contractor with your own limited company or a director of a large company, there are many reasons why you may wish to close down your company and walk away – even if it’s doing well and turning a profit.
Reasons you may want to close your limited company
If you’ve been running your company for a number of years you may be heading into retirement age. Lots of directors choose to close their company when they retire. You may not have anyone to pass on the company to, such as a family member or co-worker; or you may simply want to take your money out of the business and enjoy your retirement.
A lot of directors want to close down their company so that they can move abroad. Some will be moving as part of their retirement plan, but many are heading back home after several years in the UK earning good money. Far from retiring, they are looking to start new work when they get there – but they have no further need for their current company.
Becoming an employee
Some directors like the work they do, but they no longer like running their own business. A company may be very profitable or it may be having cashflow issues – either way, we help lots of directors to shut their company so that they can become an employee instead of being a company director.
Unmanageable business debts
Closing a company due to mounting business debt is common. A lot of the time, when a company finds itself in debt, it can be temporary. You could owe your suppliers or be late with payments, but know that you are owed money yourself from your own customers. However, if debt continues to pile up you may feel like it’s impossible to get back to profit and may wish to close your company.
Circumstances can change quite quickly which may mean that you are no longer able to run your business. It could be health issues, family related or you may even find yourself with a new business opportunity! Any of these personal reasons could result in your wanting to close down your company.
Disagreements with directors
In business, disagreements occur….disagreements between your clients, your staff, your suppliers and even your other directors. No longer seeing eye-to-eye with your fellow directors can put a massive strain on you. It may result in you wanting to walk away from your company, if you feel the disagreements cannot be resolved.
Starting a new company
You may want to close your company and start a new one. We often see company directors close down their operation in favour of going it alone. This way, they don’t have the pressure or responsibility for an entire staff, rather they only have to worry about themselves.
Ways to close your company
If your company is solvent (i.e. it can pay all of its bills), the best way to close it down could be through a Members’ Voluntary Liquidation (MVL).
Depending on your circumstances, an MVL could be the most tax-efficient way to close your company and it could save you thousands of pounds.
If your company is insolvent (i.e. it can’t pay all of its bills), a Creditors’ Voluntary Liquidation (CVL) could be the best option for you.
A CVL acknowledges your legal duties as a director to your creditors (i.e. the people you owe money to). Also, it does not harm your reputation as a company director for any future endeavours.
For more information about closing your company
If you are looking to close your company – whether it is solvent or insolvent – Clarke Bell can help you.
As a firm of Licensed Insolvency Practitioners for over 23 years, we have a wealth of expertise in company liquidations (both MVLs and CVLs).
We can discuss your options with you, and recommend the best course of action for your specific situation.
Our advice is free, and our service is nationwide.
Get in touch today on 0161 907 4044 or [email protected]