The Cheapest Way to Close a Limited Company

The Cheapest Way to Close a Limited Company. Written by John A Waller. Reviewed: June 26th,2024.

If performed correctly and at the earliest warning signs, directors may avoid paying the fee to close the company.

A common misunderstanding among company directors is that if a company liquidates, they must pay the fees. However, if caught early, directors often pay insolvency fees through company assets.

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HBG Advisory always aims to make a company closure self-funded.

As licensed insolvency practitioners, HBG Advisory advises directors on how to close a limited company. Our robust, experienced, professional, unbiased advice guides directors on the cheapest way to do so. 

The team at HBG Advisory specialises in corporate insolvency. 

HBG Advisory always advises on the best solution. Closing a limited company can be as straightforward as filing a form DS01 at Companies House. The cost is £33 to apply online or £44 for a paper application.

However, company directors who pay their employees’ final wages from their funds rather than the company remain one of the most common mistakes that distressed company directors face. The UK government pays unpaid wages and redundancies if the failing company has no cash. HBG Advisory always advises and helps employees through this process. 

Suppose your company is insolvent; a company director’s legal obligation is to cease trading and seek advice. Company directors should approach licensed insolvency practitioners. They will, therefore, explore options from maintaining trading subject to the company’s viability using a company voluntary arrangement to closure using a creditor voluntary liquidation. If liquidation is chosen as the best option, you may be able to close your company without any personal financial cost to the director.

The Cheapest Way to Close a Limited Company Which Insolvency Process 

Is your limited company insolvent? Company directors have two options.

Option 1.

You can close your company voluntarily through a Creditors Voluntary Liquidation CVL.

Option 2.

By an involuntary method. A Compulsory Liquidation.

Should your limited company be solvent, then two options exist

Option 3.

If your company has assets less than £25,000 in value, dissolve your company.

Option 4.

However, if your company’s assets are over £25,000 once all debts are paid, a Members Voluntary Liquidation (MVL) is the best and most tax-efficient option.

Option 1 and 4, though, however, require the appointment of a licensed insolvency practitioner. A CVL can be accessible to directors if the company has assets to cover the liquidator’s costs. Failing that, the directors will, therefore, cover the fee, which can be anything from £4,000 plus disbursements, depending on the size of the liquidation.

An MVL can be a fixed fee and start at £995 plus disbursements. HBG Advisory offers Fixed-Price MVLs.

Option 2 has a court-appointed official receiver from the insolvency service act as a liquidator. The appointment does not require money from the directors to carry out this insolvency process.

Option 3 requires a Form DS01.

For further detailed information and to determine how much to liquidate my company, please contact a team member at HBG Advisory at 0330 056 3120.

All fees quoted are subject to VAT at 20%.

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