How to close a Limited Company

There are many ways to close a limited company.  Directors and shareholders must all be in agreement in order to do so.  

The way in which it is closed depends on whether the business is solvent or insolvent.


If you are able to pay all of your debts as and when they fall due, your business is solvent.  

You can apply to get the company struck off the Register at Companies House or you can close the business with a MVL (Members Voluntary Liquidation) which is used to release capital in the most tax efficient way.  

You would need help to do this from a licensed Insolvency Practitioner.  See our MVL’s page for more information.


If the company is experiencing cashflow difficulties and you are unable to pay your bills as they fall due, the business could be insolvent.

When a company is insolvent you should arrange to liquidate the company.  If you don’t, a creditor could apply for a winding up petition to close your company down.


If you would like to rescue your business to try to avoid liquidation, there could be a third option open to you called a CVA (Company Voluntary Arrangement) where you would come to an arrangement to pay all creditors and remain in control of the business.  

Again, you would need the help of a licensed Insolvency practitioner.  See our CVA’s page for more information.

An administration procedure is another option you may want to consider in order to sell the business.

Unsure if your business is solvent or insolvent?

Take our quick and easy Insolvency test to find out


If the company doesn’t have a director

If a company does not have a director because a sole director has died for example, you must appoint a new director.  Shareholders must agree and may need to vote on it.  
If there aren’t any shareholders the executor of the estate can appoint a new director, as long as the company’s articles allow it.

The newly appointed director can then arrange to close the company.

If a director is not appointed Companies House will eventually strike off the company but this can make it more difficult to manage any assets the company may have.

Let the company become dormant

You can keep a limited company dormant for as long as you want, and you don’t have to close the company if it’s no longer trading.  

The company will still be registered at Companies House and as long as you are not carrying out any business activities, trading or receiving income you can simply let it become ‘dormant’.

You will still need to complete and send your annual accounts and confirmation statement to Companies House.


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