Close My Company

Understand how you can close your company, with guidance that is relevant to you and avoids potential pitfalls that could result in personal liabilites

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How to close your company depends on the company’s financial situation and your desired outcome.

The first question is, can the company pay all its debts?

If it can, then Dissolution or MVL are the options.

If it can’t, the company is insolvent and liquidation is likely to be the best solution.

Further information on Closing Your Company

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    Liquidations (MVL)

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    Liquidation (CVL)

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    Dissolution

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WHAT HAPPENS WHEN THE SOLE DIRECTOR AND SHAREHOLDER OF A LIMITED company PASSES AWAY?

Janet Mayo – Insolvency Practitioner says:

I was recently asked by an accountant to meet with a widow who had lost her husband literally days prior to our meeting.

At the meeting it became clear that there was no Director

Without a director, the company was effectively frozen, while still legally existing, it could not trade or appoint a liquidator or make decisions until a new director was in place. This lead to several problems for the company and its stakeholders:

  • Bank account frozen
    The bank account was frozen as there was-no director in place, as banks require an authorised signatory to approve actions. Some banks may allow executors to access accounts if explicitly stated in the articles of association.
  • Employees unpaid
    Without full access to bank accounts, employees’ wages were unabled to be paid.
  • Contracts and operations halted
    The company was unable to fulfil existing contracts or make key business decisions
  • Creditors can take legal action
    If the company is unable to pay its debts, creditors may instigate legal proceedings and potentially to have the company placed into compulsory liquidation.      

The widow had limited information regarding the Buisness. 

It became apparent that men were still on site 

Between the Accountant and I it became apparent that the company was insolvent.

I spoke to the charge holder, a factoring company to explain the situation and to see if it was possible to make application to court and appoint an Administrator to take control of the company. Whilst they were extremely helpful they declined .

I spoke to a number of creditors and some of the work force all of whom were very supportive, but clearly wanted clarity regarding on going payments.

The company without a Director or Shareholder could not legally continue to trade so as not to compound matters the decision was made for the company to immediately cease trading.

How is a new director appointed?

I reviewed the company’s ‘articles of association’. that sets out how a company is run, governed and managed. Some articles of association allow the executor of the deceased estate to appoint a new director. This is usually the quickest route to appointing a new director. 

Unfortunately however, the  Director had died intestate and we needed to appoint a solicitor to act for the Widow and in turn to be able to formally instruct us to deal with the winding down of the company and its Liquidation.

We spoke with Giselle Williams & Louise Salisbury of AST Hampsons solicitors who quickly set to work and in a much shorter time than usual obtained the letters of Administration together with probate thus enabling the widow to instruct DMC Recovery to place the company into creditors voluntary liquidation.

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Frequently Asked Questions

A company is dissolved when it is removed from the register at Companies House. It ceases to exist as a legal entity and any property which it still owns at the date of dissolution goes to the Crown as bona vacantia. It is possible to apply to the court to have a dissolved company restored to the register but there are costs involved.

An application by the liquidator
An application by the directors
An application by the Registrar of Companies because the company has failed to file accounts or a Confirmation statement within the required time period.

Yes it is possible for a director or creditor to object to an application to strike off.