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There are many reasons why you might want to dissolve or liquidate your limited company. Perhaps you experienced early success, but the market has now shifted, or maybe your business is still successful but you are approaching retirement and there is no one available to take over from you. Whatever your reasons for closing you company, you should explore the range of options open to you, as reversing this decision can be costly.

There are two ways to terminate a company.

1/ Company dissolution: 

To dissolve a company, also known as ‘striking off’, essentially means removing the name of the business from the official Company Registry. After dissolution, the company ceases to legally exist. The dissolving of a company is often a voluntary process; however the Company Registry can dissolve companies that have not kept up with their accounting responsibilities such as filing accounts and tax returns.

In order to proceed with voluntary dissolution, all loose ends, including the payment of outstanding taxes and creditors, must be tied up. Due to this, dissolution is only an option for solvent companies and should not be seen as a way to evade creditors. There are certain conditions that must be met before a company is eligible for dissolution.

2/ Company liquidation: 

Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due. As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims. 

PCA is able to help, please contact us. 

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