How to Close a UK Limited Company

Editor’s note: Originally published on 13 January 2023; this article reflects information available at that time, and rules may since have changed.

Closing a company is not simply a matter of stopping trade. The correct route depends on whether the company is solvent, has debts, has traded recently and is involved in legal proceedings.

Voluntary strike-off

A solvent company may be able to apply for voluntary strike-off if it satisfies the statutory conditions. Restrictions can apply where the company recently traded, changed its name or is subject to insolvency proceedings.

Steps before applying

• Stop trading and collect money owed to the company
• Pay or agree the treatment of creditors and taxes
• Complete final payroll, VAT and Corporation Tax obligations
• Distribute remaining assets correctly
• Close accounts and retain required records

Who must be told?

Directors should notify relevant parties, including shareholders, creditors, employees, HMRC and other affected organisations. Copies of a strike-off application must be sent to the people required by law.

When strike-off is not suitable

If the company cannot pay its debts, a formal insolvency procedure may be necessary. Directors should take insolvency advice promptly because their duties change when creditor interests are at risk.

Leon Advisers can help prepare final accounts and tax filings for a solvent closure. Email info@leonadvisers.com.