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UK Company Liquidation

Updated:2018-5-24 16:51:16    Source:www.tannet-group.comViews:314

UK company liquidation may happen due to various reasons. You may choose members’ voluntary liquidation if your company is ‘solvent’ (can pay its debts) and one of the following applies: you want to retire; you want to step down from the family business and nobody else wants to run it; you don’t want to run the business any more.

You can choose to liquidate your limited company (also called "winding up" a company). The company will stop doing business and employing people. The company won’t exist once it’s been removed (‘struck off’) from the companies register at Companies House.

When you liquidate a company, its assets are used to pay off its debts. Any money left goes to shareholders. You’ll need a validation order to access your company bank account. If that money hasn’t been shared between the shareholders by the time the company is removed from the register, it will go to the state. You’ll need to restore your company to claim back money after it’s been removed from the register.

Types of Company Liquidation in UK
There are three types of liquidation, namely,
(1) creditors’ voluntary liquidation - your company can’t pay its debts and you involve your creditors when you liquidate it;
(2) compulsory liquidation - your company can’t pay its debts and you apply to the courts to liquidate it;
(3) Members’ voluntary liquidation - your company can pay its debts but you want to close it.

In addition, your company may be forced into liquidation if it can’t pay its debts.

Apply to Liquidate a Company
You usually need to have the agreement of your company’s directors and shareholders to close a limited company in the United Kingdom. To apply to strike off your limited company, you must send Companies House form DS01. The form must be signed by a majority of the company’s directors.

You should deal with any of the assets of the company before applying, e.g. close any bank accounts and transfer any domain names. When your company is dissolved, all the remaining assets will pass to the Crown (including any bank balances).

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