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What Happens If I Can’t Afford to Liquidate My Company?

The quick answer

Usually, a creditor like HM Revenue and Customs will petition to wind the company up and it will then be put into liquidation. There are still alternatives though – more on these below.

In more detail

There are three main choices to close down an insolvent company:

  1. You pay for liquidation, but this will be at least £3,000 plus VAT. You will need a Licensed Insolvency Practitioner like us to do this.
  2. You wait for someone to issue a winding up petition – you may have to wait three to six months for this. The most common creditor to wind a company up is HM Revenue and Customs.
  3. You use from DS01 available from Companies House. It is not actually a liquidation but a good cheap way to strike off a defunct company. It only costs £8 to do online. You have to be careful though and follow the rules on the form.

You might wonder why directors then pay for a company to be liquidated?

The reasons are:

  1. It is quick and takes about 10 days.
  2. It gets the creditors off your back as they have to deal with us.
  3. It is the best way to deal with any assets left.
  4. It helps employees make their redundancy claims quickly from the government.
  5. It stops the need to file accounts, VAT and PAYE information.

Contact Kirks Today

If you have any questions, please do email or call me.

tip

If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

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David Kirk

Author

David Kirk ACA FABRP

Just a quick email to say a heartfelt thank you for your very calm, considered, expert advice regarding my circumstances on Tuesday. Things looked bleak before you explained my options much more clearly, in simple layman’s terms.
Rob Elliott (14th December 2021)

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David Kirk

Licensed Insolvency Practitioner