Can I Liquidate My Company if it has No Cash or Assets?

The short answer is not easily, without the funds to appoint an insolvency practitioner (IP).

However, it can be closed down, with the same end result as creditors voluntary liquidation. The process you would need to go through is called a voluntary dissolution.

This process can remove your company from the official register on Companies House if certain conditions are met, which we have outlined below.

Advantages of using a dissolution process:

• Avoids the high cost of liquidation
• Quickly removes the dormant company from the Companies House Register
• Less invasive process – no need for investigation into conduct of affairs, which is required in liquidation or receivership

If this sounds like the perfect solution to the situation you are in, read on.

Is my company suitable for dissolution?

The conditions that must be met for a company to go through the dissolution process include:

1. A 3-month period should be allowed for creditors to consider the request
2. The company must not have changed its name in this period
3. It holds little or no assets, and less cash in the bank than is needed to pay creditors
4. Assets must not have been disposed of prior to the procedure (including land, buildings equipment, etc.)
5. It employs no staff that are entitled to redundancies, as it will not be possible to claim these using a dissolution process

Take our free online test to see if your company is suitable for dissolution

Should I pay any debts that I can?

Paying company debts does not necessarily constitute as trading, but if the company is insolvent then you must avoid showing preferential treatment to any creditors.

Will this affect me personally?

The dissolution process should not have any effect on the personal life of the director of a company (other than possibly the need for a new job or venture!)

Once a company has been closed via dissolution, it is of course technically public knowledge that the director was once in control of a company that has now been closed. In reality, it is not likely that many will do enough in-depth research to discover this, and if they do, they can’t see the reason for it.

If the company was closed with outstanding debts, this fact is not public knowledge; for all anyone knows, the director has changed business sectors or decided to alter their lifestyles.

Your personal credit rating will also not be effected, unless credit is needed to repay amounts that have been personally guaranteed.

I am getting harassed by creditors!

If you just want the problem to go away without having to spend months negotiating with creditors, then this is where we step in.

If you appoint Forbes Burton to deal with your company’s dissolution, we would just need a few pieces of information from you before we can fully take the burden from your shoulders.

All letters and phone calls from people your company is indebted to can be re-directed for us to deal with, leaving you to get on with your life, while we do the complicated stuff.

Next steps

If you would like to learn more about dissolution, just give us a call on 0800 975 0380 and you can have a completely free, no-obligation chat with one of our friendly advisers to discuss your options.