One of the cheapest ways to close a limited company is through a process called “striking off.” This is a relatively simple and inexpensive process, which involves submitting an application to Companies House to remove the company from the register.
To be eligible for striking off, the company must have no outstanding debts, no ongoing legal action, and no assets remaining.
Alternatively, if the company has debts, the shareholders can consider a voluntary liquidation, which involves appointing a liquidator to wind up the company’s affairs and distribute the assets to creditors.
However, this process can be more expensive than striking off, so it’s important to carefully consider the options and seek professional advice before proceeding.
Cheap way to close a Limited Company
If a limited company has no debt, there are several cost-effective ways to close it down. One option is to apply for voluntary strike off, which involves submitting an application to Companies House to remove the company from the register. This process is relatively straightforward and can cost as little as £10 if completed online.
Before applying for voluntary strike off, the company must ensure that all outstanding accounts and tax returns are up to date and that all assets have been distributed among the shareholders.
Another option is to dissolve the company through a members’ voluntary liquidation (MVL). This involves appointing a liquidator to manage the process of winding up the company’s affairs and distributing any remaining assets to the shareholders.
While an MVL can be more expensive than a voluntary strike off, it may be a better option if the company has significant assets to distribute or if there are complex legal issues involved.
Ultimately, the cheapest way to close a limited company will depend on the specific circumstances of the company, so it’s important to seek professional advice before making any decisions.
What if your company is insolvent – is there a cheap way to close it down?
If a limited company is insolvent, meaning it cannot pay its debts as they fall due, there are still options for closing it down, but they may not be as cheap as for a company with no debt.
The most common option is to enter into a formal insolvency process, such as a creditors’ voluntary liquidation (CVL), which involves appointing a licensed insolvency practitioner to manage the process of winding up the company’s affairs and distributing its assets to creditors.
While a CVL can be more expensive than a voluntary strike off or members’ voluntary liquidation, it may be the only option if the company has significant debt and cannot meet its obligations.
There are also other options to consider, such as a company voluntary arrangement (CVA), which involves negotiating a repayment plan with creditors, or administration, which involves placing the company under the control of an administrator to help restructure its affairs.
It’s important to seek professional advice as soon as possible if your company is insolvent to explore all available options and find the most cost-effective solution for closing it down.
Read more: How to liquidate a company
Frequently asked question
The cheapest way to close a ltd company is through filling out and submitting a DS01 form at Companies House. This option is only available to a company that does not have debts. What is the cheapest way to close Ltd company?
Conclusion
Closing a Ltd company can be a complex and costly process, but there are some relatively cheap ways to do so. One option is to voluntarily strike off the company, which involves submitting a DS01 form to Companies House, along with a fee of £10. This is only possible if the company has not traded or conducted any business in the previous three months, has no outstanding debts or obligations, and has no assets remaining.
Alternatively, if the company is insolvent and cannot pay its debts, a creditors’ voluntary liquidation (CVL) may be the best option. This involves appointing an insolvency practitioner to liquidate the company’s assets and distribute the proceeds to creditors. While there are fees associated with this process, it may be the most cost-effective way to close a Ltd company that cannot meet its financial obligations.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.