Liquidate your limited company

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1. Overview

You can choose to liquidate your limited company (also called 바카라 사이트˜winding up바카라 사이트™ a company).

There바카라 사이트™s a different process if you want to or .

The company will stop doing business and employing people. The company will not exist once it바카라 사이트™s been removed (바카라 사이트˜struck off바카라 사이트™) from the at Companies House.

When you liquidate a company, its assets are used to pay off its debts. Any money left goes to shareholders. You바카라 사이트™ll need a validation order to access your company bank account.

If that money has not been shared between the shareholders by the time the company is removed from the register, it will go to the state.

You바카라 사이트™ll need to restore your company to claim back money after it바카라 사이트™s been removed from the register.

There are 3 types of liquidation:

Your company may be forced into liquidation if it cannot pay its debts.

2. Arrange liquidation with your creditors

A director can propose a company stops trading and be liquidated (바카라 사이트˜wound up바카라 사이트™) if:

  • the company cannot pay its debts (it바카라 사이트™s 바카라 사이트˜insolvent바카라 사이트™)
  • enough shareholders agree

Get shareholders바카라 사이트™ agreement

You must call a meeting of shareholders and ask them to vote.

75% (by value of shares) of shareholders must agree to the winding-up to pass a 바카라 사이트˜winding-up resolution바카라 사이트™.

Once the resolution is made there are 3 steps you must follow.

  1. Appoint an authorised insolvency practitioner as liquidator to take charge of liquidating the company. You can find an insolvency practitioner online.

  2. Send the resolution to Companies House within 15 days.

  3. Advertise the resolution in within 14 days.

Your responsibilities as a director will change.

3. Apply directly to the court

A director can ask a court to order the company to stop trading and be liquidated (바카라 사이트˜wound up바카라 사이트™).

This is known as 바카라 사이트˜compulsory liquidation바카라 사이트™.

You need to show the court that:

  • the company cannot pay its debts of £750 or more
  • 75% (by value of shares) of shareholders agree that the court can wind up the company

Your company can be based anywhere but must carry out most of its business in England and Wales.

How to apply

Fill in a 바카라 사이트˜winding-up petition바카라 사이트™ (form Comp 1) and send it to the court with:

  • form Comp 2 confirming the details of your petition
  • the winding-up resolution from the shareholders

Where you send the petition depends on how much 바카라 사이트˜paid-up share capital바카라 사이트™ your company has. You can find this on the .

Your paid-up share capital is £120,000 or more

. It바카라 사이트™ll go to the High Court.

Your paid-up share capital is under £120,000

Find your nearest court that deals with bankruptcy.

if it바카라 사이트™s one of these courts:

  • Admiralty and Commercial Court
  • Chancery Division
  • Companies Court
  • High Court (including Bankruptcy Court)
  • London Mercantile Court
  • Rolls Building

If it was another court you바카라 사이트™ll need to submit the petition by post.

Fees

It costs:

  • £2,600 to submit the petition
  • £280 for the court hearing

After you apply

You바카라 사이트™ll get a date for the hearing if the court accepts your petition.

Before the court hearing, you must:

  • give (바카라 사이트˜serve바카라 사이트™) a copy of the petition to your company - fill in a certificate of service to let the court know you바카라 사이트™ve done this
  • put an advert in at least 7 days before the hearing
  • send a copy of the advert and the certificate of service to the court

The court hearing

You or your solicitor must be at the court hearing. You do not have to give any evidence.

If the court gives a winding-up order, the court will put an official receiver in charge of the liquidation. They바카라 사이트™ll start liquidating your company. A copy of the winding-up order will be sent to your company바카라 사이트™s registered office.

Your role as a director will change.

4. Liquidate a company you do not want to run anymore

You may choose members바카라 사이트™ voluntary liquidation if your company is 바카라 사이트˜solvent바카라 사이트™ (can pay its debts) and one of the following applies:

  • you want to retire
  • you want to step down from the family business and nobody else wants to run it
  • you do not want to run the business any more

Make a declaration of solvency

To pass a resolution for members바카라 사이트™ voluntary liquidation, you must make a 바카라 사이트˜declaration of solvency바카라 사이트™.

You바카라 사이트™ll need to review the company바카라 사이트™s assets and liabilities.

Write a statement saying that the directors have assessed the company and believe it can pay its debts, with interest at the official rate. You should also include:

  • the name and address of the company
  • the names and addresses of the company바카라 사이트™s directors
  • how long it will take the company to pay its debts - this must be no longer than 12 months from when the company바카라 사이트™s liquidated

You also need to include the statement of the company바카라 사이트™s assets and liabilities.

After you바카라 사이트™ve signed the declaration or form

There are 5 further steps to members바카라 사이트™ voluntary liquidation.

  1. Sign the declaration or form 4.25 (Scot) - it must be signed by the majority of directors in front of a solicitor or 바카라 사이트˜notary public바카라 사이트™.

  2. Call a general meeting with shareholders no more than 5 weeks later and pass a resolution for voluntary winding up.

  3. At the meeting appoint an authorised insolvency practitioner as a liquidator who will take charge of winding up the company. You can find an insolvency practitioner online.

  4. Advertise the resolution in within 14 days.

  5. Send your signed declaration to Companies House or form 4.25 (Scot) to the (for Scottish companies) within 15 days of passing the resolution.

Companies House
Crown Way
Cardiff CF14 3UZ

When the liquidator is appointed they take control of the company. Your responsibilities as a director will change.

5. What the liquidator does

The liquidator is an authorised insolvency practitioner or official receiver who runs the liquidation process.

As soon as the liquidator is appointed, they바카라 사이트™ll take control of the business.

They will:

  • settle any legal disputes or outstanding contracts
  • sell off the company바카라 사이트™s assets and use any money to pay creditors
  • meet deadlines for paperwork and keep authorities informed
  • pay liquidation costs and the final VAT bill
  • keep creditors informed and involve them in decisions where necessary
  • make payments to creditors
  • interview the directors and report on what went wrong in the business
  • get the company removed from the companies register

In a creditors바카라 사이트™ voluntary liquidation, the liquidator acts in the interest of the creditors not the directors.

6. What happens to directors

When a liquidator is appointed, directors:

  • no longer have control of the company or anything it owns
  • cannot act for or on behalf of the company

If you바카라 사이트™re a director you must:

  • give the liquidator any information about the company they ask for
  • hand over the company바카라 사이트™s assets, records and paperwork
  • allow the liquidator to interview you, if they ask

You can be banned from being a director for 2 to 15 years or prosecuted if the liquidator decides your conduct was unfit.

Re-using company names

If you were a director of a company in compulsory liquidation or creditors바카라 사이트™ voluntary liquidation, you바카라 사이트™ll be banned for 5 years from forming, managing or promoting any business with the same or similar name to your liquidated company. This includes the company바카라 사이트™s registered name and any trading names (if it had any).

The only exceptions to this are where:

  • the business is sold by a licensed insolvency practitioner giving the legally required notice
  • you get the court바카라 사이트™s permission to use the name
  • you바카라 사이트™re involved with another company that바카라 사이트™s been using the same name as the liquidated company for at least a year

Read the guidance on re-using company names.

7. Access to your bank account

Your company바카라 사이트™s bank account will be frozen when someone files a petition to wind up the company.

You need a validation order to access it.

How to apply for a validation order

Tell the person who filed the winding-up petition (the respondent) you바카라 사이트™re applying for a validation order. You must also tell them what court you바카라 사이트™ll apply to (usually the Companies Court) and when you바카라 사이트™ll apply.

Fill in Form IAA and write a . Take the form and the statement to the court.

You need to pay a £155 fee.

What happens after you apply

You바카라 사이트™ll be given a hearing on the same day or within the next few days.

At the hearing, you present your case to a registrar or district judge.

The respondent will present their case if they object to you getting a validation order.

At the end of the hearing you바카라 사이트™ll either:

  • get a decision - you바카라 사이트™ll also get a written copy sent to you
  • be asked to attend another hearing if the court wants more evidence

You바카라 사이트™ll be given the validation order if your application is successful. You must give your bank a copy of this to access your company바카라 사이트™s bank account.

If you do not agree with the decision you may be able to appeal to the Chancery Division of the High Court.