Liquidation is a formal way to close your business, whether or not it has debts, and is conducted by a licensed insolvency practitioner (IP).
Liquidate my solvent retail business
Members’ Voluntary Liquidation is highly tax efficient and can help you extract the highest amounts from your retail business if you have distributable profits of around £25,000 or more. Initially, 75% or more of shareholders must vote in favour of entering MVL and pass a resolution.
Once a licensed insolvency practitioner is appointed, company assets are transferred to new ownership or sold and the profits are distributed. The company is removed from the register at Companies House and closes down permanently.
Liquidate my insolvent retail business
If your business has outstanding debts that it cannot afford to repay, Creditors’ Voluntary Liquidation allows you to close it down whilst meeting your legal obligations as a company director.
Business assets are processed by the appointed IP via a liquidation auction, but company creditors receive the proceeds rather than the shareholders. If any debts are outstanding following this, they are written off and the company is officially closed.
One of the benefits of closing your company via liquidation is receiving professional support. This ensures that you do not fall foul of any UK laws, which is particularly important in the case of insolvent companies.
If your company can pay its debt but has lower profits to distribute, however, company dissolution offers you an inexpensive way to close your business.