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Are you looking to close down your limited company?

Many freelancers / contractors run their business through a limited company (sometimes referred to as a Personal Service Company).

At some stage, every freelancer / contractor trading with a limited company is going to want to close it down – unless they sell it to someone. In many cases, however, even when a company is very successful and profitable, the director is unable to sell it because they (essentially) are the company – which means there is nothing to sell if they are no longer going to be involved with it.

If you are looking to close down your limited company with a liquidation process, we can help you.

There are two very different types of liquidation process we can help you with:

  • when your company is solvent (i.e. it can pay all of its bills).
  • when your company is insolvent (i.e. it cannot pay all of its bills).

Closing down your solvent company

The main reasons for closing down a solvent company are:

  • Retiring
  • Moving abroad
  • Taking up an employee role – possibly due to the IR35 changes

A Members’ Voluntary Liquidation (MVL) is often the most tax-effective way for you to close down the company and extract the assets (which is often just money in a company bank account). Another reason why an MVL is a tax-effective solution, is due to Business Asset Disposal Relief (formerly called Entrepreneurs’ Relief), which means you can benefit from a 10% marginal rate on distributions, if you’re eligible – which most people are.

Our fee for an MVL is from just £995 (+VAT +disbursements).

Find out more about contractor MVLs from £995

Closing down your insolvent company

There are cases where the contractor’s company finds itself with cash flow problems – often due to unpaid HMRC bills.

In these cases, a buyer is unlikely to want to purchase the company and take on the insolvent business. So, the director(s) will then be left with no alternative but to shut down their insolvent company.

They won’t be able to continue to trade anyway if the contractor’s company is insolvent, and it can be an immensely stressful situation for any director(s) who can’t repay existing debts.

If you need to close down your insolvent company, then doing so voluntarily, will not only allow you to avoid any added worry and stress, by putting the interests of your creditors first, you’ll also avoid facing the harsher penalties that can arise from being forced into compulsory liquidation.

The Construction Sector

In the construction sector, many sub-contractors are put under strain, due to late payments and ‘subby-bashing’ tactics by the larger, more powerful firms. A lot of the smaller contractors, with already very tight margins, can easily find themselves getting into serious financial trouble.

 

Many of these smaller contractors fear losing future business and so they delay chasing up customers who are slow to pay them. This can lead to serious cash flow issues.

In these situations, a Creditors’ Voluntary Liquidation (CVL) is often the best solution.

What are the benefits of a CVL?

A CVL can:

  • Allow you to explore other business options, as creditors will be unable to take action against you (providing you have no personal liability for a company debt).
  • Give you a relatively low cost and quick solution to formally closing down your company, whilst complying with all your director duties.
  • Help to steer you away from any implications of wrongful trading by creditors.
  • Take the pressure off, and put control back into your hands.
Find out more about Creditors' Voluntary Liquidations from £3,500 +VAT

We have the experience to help contractors and freelancers

At Clarke Bell, we have extensive experience and expertise when it comes to helping contractors and freelancers close down their companies – whether the company is solvent or insolvent.

Whatever your situation, we can help you.

If a liquidation process is not the best option for you, we will advise you on the more suitable alternative.

For your free expert advice 0161 907 4044

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