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

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.