Yes, it is possible to close your business and walk away, but there are many variables, and a lot depends on your company’s financial position.
Reasons why a business owner may want to close their company and walk away, could also include:
- moving into full-time employment
- not enjoying the experience of running your own business
- struggling to keep your head above water and wishing to cut your losses.
Whatever the reason for closing your limited company, there are a number of options at your disposal.
- Two options to consider are – voluntary strike‐off or Members’ Voluntary Liquidation (MVL).
- If your company is solvent, a voluntary strike‐off may be an option. However, this isn’t a formal procedure and can lead to reinstatement if creditors aren’t informed.
- A creditor who later learns about the company’s closure can then apply to have it reinstated to the Companies House register. It would be treated as if dissolution hadn’t occurred, and the creditor could make a claim for their debt.
- Members’ Voluntary Liquidation (MVL) is a process that must be actioned by a licensed insolvency practitioner. Using an IP allows the business to close down correctly and ensures all due statutory process is followed.
- If you’re considering closing your company, always seek professional advice from an experienced insolvency practitioner to ensure you choose the correct procedure for your business.
Closing your solvent business tax‐efficiently
Members’ Voluntary Liquidation has several benefits, most notably it’s tax‐efficiency.
Distributions are taxed as capital rather than income, and your tax liability can be reduced by claiming Business Asset Disposal Relief. This allows you to walk away from the business with a higher return from your investment.
Clarke Bell are MVL specialists and have extensive experience helping directors close down their business in this tax‐efficient way.
Here are some key points to keep in mind:
- Members’ Voluntary Liquidation is tax‐efficient, with distributions taxed as capital rather than income.
- You may be eligible for Asset Disposal Relief, which lowers your tax liability to an effective rate of 10%.
- Clarke Bell are specialists in this area and can help you close down your business smoothly and efficiently.
How does Members’ Voluntary Liquidation work?
When a business is insolvent, company directors have a few options to consider. One of these is Members’ Voluntary Liquidation (MVL). This process allows the company to cease trading, pay off creditors and distribute any remaining funds amongst shareholders.
In order for MVL to take place, the directors must declare that the company is solvent and pass a resolution at a shareholder meeting. Once this has been done, the company’s assets are liquidated, and any money owed to creditors is paid off. The next step is for the company name to be removed from the Companies House register.
MVL is only an option for insolvent companies. If you’re unsure whether your company falls into this category, you can seek professional advice.
MVL might be the right option for your company if:
- You want to close your company and pay off creditors
- Your company is insolvent
- You want to distribute any remaining funds amongst shareholders
- You want to remove the company name from the Companies House register.
- Our standard fee for an MVLis £995 (+VAT, +disbursements).
- We aim to distribute the assets of the company after 35 days from the date of Liquidation.
- So, an MVL is an affordable, quick and easy way for you to close your company and walk away with your hard-earned money.
Do you want to close your insolvent business and walk away?
If you’re a limited company director seeking advice on business insolvency, you may be wondering if it’s possible to walk away and leave your company with its debts?
Fortunately, as long as you’ve acted within the law and aren’t found to be responsible for your company’s decline through misconduct or fraud, you can close down your business and walk away. However, there are a few things you should keep in mind before making this decision.
Here are a few important things to keep in mind if you’re considering walking away from your insolvent business:
- You must ensure that you’ve acted within the law and aren’t found to be responsible for your company’s decline through misconduct or fraud.
- Closing down your business and walking away may not be the best solution for your company’s creditors.
- You should seek professional advice before deciding to close your business.
If you want to close your company and walk away, you must know your options. Creditors’ Voluntary Liquidation (CVL) is the best option. It allows directors to fulfil their legal obligations and protects creditor interests.
- Directors must cease trading and seek professional assistance
- CVL is the best option for fulfilling legal duties and protecting creditor interests
- Directors need to take action quickly to maximise the chances of a successful outcome.
How does CVL work?
Creditors are informed of the company’s position and invited to make their claims. The company’s assets are sold to pay creditor claims as far as possible, with any remaining debts being written off. The company name is then removed from the Companies House register. This may be a good option for your business if you are struggling to repay debts.
Learn more about how it works and if it’s the right solution for your company below.
If you’re a limited company director who’s finding yourself in financial trouble, it’s important to know your options. CVL incurs professional fees, allowing eligible directors to claim redundancy pay. This could indeed cover the cost of the procedure. The chances of misconduct or wrongful trading allegations being made against you will be reduced by following this process. This will increase the likelihood of walking away with no repercussions.
Here are some key points to keep in mind if you’re considering CVL:
- CVL incurs professional fees, but it also allows eligible directors to claim redundancy pay, which could cover the cost of the procedure.
- By following this process, you can reduce the chances of misconduct or wrongful trading allegations being made against you.
- The likelihood of walking away with no repercussions is increased when following this process.
- If a CVL is the best solution for you, our fee for a CVL is from £2,995(all inclusive).
- A CVL enables you to close your company and walk away, confident that you have fulfilled all your legal duties. This means that you will not need to be ‘looking over your shoulder’ or worrying that something to do with your old company will come back to haunt you.
- You will then be in a great position to start afresh. And, if you want to start a new business, we can help you to raise the funds you will need.
If you need further information on how to close your business and walk away, then please get in touch with our expert team Clarke Bell. We can arrange a same‐day consultation free of charge.
We understand that making the decision to dissolve a company is not an easy one; Clarke Bell can help make the process as smooth and stress-free as possible. Here are just a few of the reasons why you should consider working with us:
- We have extensive experience in helping businesses close down and claiming director redundancy
- We offer free consultations so that you can explore all of your options
- Our head office is located in Manchester but we help businesses nationwide
If you are ready to take the next step, don’t hesitate to contact us today. We look forward to helping you through this difficult time.