How To Close A Company At Companies House
There are a number of reasons why you may wish to close your limited company rather than keep it dormant, but all motivations for company closure share one key step: the business must be removed from the register at Companies House. The complexity of this process varies significantly depending on the position the company is in and therefore it’s important to know which rules and methods might apply to you.
To equip you with the information needed to close your company at Companies House, we have outlined everything you need to know about the different processes that you might encounter in this handy guide.
What Is Companies House?
Companies House is the official register of companies in the United Kingdom and is responsible for approving the incorporation of companies at the start of their life and holding up-to-date information including their registered addresses, financial statements and director details. Companies House is also responsible for approving the dissolution of companies when they wish or are forced to close. The final step of closing a company that wishes to no longer exist is therefore closing it at Companies House and this can be done by applying for it to be removed from the register.
Closing A Solvent Company At Companies House
The way in which a business will apply to be removed from the Companies House register will typically depend on whether it is solvent or insolvent. Solvent businesses are those with assets greater than liabilities, and while you might typically associate company closure with financial difficulty, there are several compelling reasons why a solvent company may wish to close. Two processes can be used to close a solvent company at Companies House and they are:
Voluntary Dissolution
Dissolution is one way that solvent companies can close. It is typically a very straightforward process that involves applying to Companies House to be removed from the register. A time period is given in which other parties can object to the proposed dissolution, after which (providing there are no objections) the company will be ‘struck off’ from the register and formally closed at Companies House.
To be able to close via voluntary dissolution, the company must meet a series of criteria that include not having traded for at least 3 months and having no outstanding debts or arrangements with creditors. This means that not all solvent companies are eligible to close at Companies House in this way.
Members’ Voluntary Liquidation
Solvent companies can also opt to close at Companies House via the Members Voluntary Liquidation (MVL) process. This is typically known as the most tax-efficient way of closing a solvent company and is favoured by directors wishing to close their company before retirement as it ensures that all business assets are suitably distributed before the company is officially removed from the Companies House register. Unlike dissolution, a licensed insolvency practitioner is appointed to oversee this process.
Closing An Insolvent Company At Companies House
In the event that an insolvent company wishes to close and is not faced with compulsory liquidation or a Winding Up Petition, the Creditors Voluntary Liquidation (CVL) process can be followed. Directors can begin closing their company in this way by first calling a meeting of shareholders who must vote in agreement. A licensed insolvency practitioner (IP) is then appointed to oversee the sale of business assets and distribution of funds to creditors. Director conduct will also be investigated to ensure that no misconduct has led to the company’s insolvency. Once all checks have been completed by the IP, the company can be struck off the Companies House register and formally closed.
How Long Does It Take?
The time taken to close a company at Companies House will depend on the method used to do so. However, you can typically expect it to take at least 3 months for a company to be removed from the Companies House register. This is because any approved dissolution must be published in the London Gazette with time given for creditors to object if necessary. Only once creditors have been given the chance to do this will the company be able to be officially removed from the register.
If your company is closed via an MVL or CVL process, it may take longer as the sale and distribution of assets will have to be finalised before the proposed closure can be advertised in the Gazette.
Get Advice On Closing Your Company Today
With different rules and processes applying to different companies, it is important that you seek specialist advice if you wish to close your company at Companies House. Speaking to an expert will not only ensure that you are following the rules but also encourage a swift and efficient company closure.
My Liquidation can provide any business wishing to close with helpful and effective advice on their options and act as the nominated IP should liquidation be the best course of action. Don’t hesitate to get in contact with us today to find out more about how to close a company at Companies House.
