When is it the most suitable option to close a business?
Many businesses trading in the UK at present may find themselves in an insolvent position, or suffer from short term cash-flow difficulties. It is always important to take prompt action if directors wish to close a business and the business does not have the ability to continue trading.
It may be the most suitable option to close a business if the business has debts it cannot afford to repay and there is no longer a viable company to be saved.
The process to close a business is officially called Creditors Voluntary Liquidation (CVL). CVL is also known as ‘insolvent liquidation’ and is the form of liquidation that is most commonly used in the UK.
To start the CVL process, the business directors appoint an Insolvency Practitioner who will liquidate all the assets, and then distribute funds back to the creditors. All outstanding business debts after the repayment are written off and the business is dissolved at Companies House. This doesn’t include debts personally guaranteed but our business debt advisors can provide specialist advice on this too.
Directors could also be entitled to a redundancy claim of up to £15,750 from the Redundancy Payments Office after they close a business. If you are unsure how to close your business, then we would urge you to seek advice from our business debt experts. To find the best solution for you, try our quick questionnaire.
All business debt solutions should be carefully considered.
To close a business, call our experienced team for business debt advice now on 0333 9999 636.