The Litmus library
Close a Limited Company in the Right Order
Closing a company means resolving its affairs before completing the appropriate legal process. The route depends on solvency, liabilities and circumstances. A strike-off application should follow a review of accounts, assets, creditors and tax rather than replace that review.
Assess solvency and the available route
List what the company owes and owns, including disputed bills, tax and money due from customers. If debts cannot be paid, obtain insolvency advice before distributing assets or applying for strike-off. The suitable process depends on the facts; a simple closure service is not appropriate for every company. Before deciding, write a short fact sheet covering the owners, the activity, the places involved and the intended outcome. Separate confirmed facts from assumptions that still need checking. Give the reviewer the actual documents rather than a summary assembled from memory. This makes the advice easier to apply and reduces the chance that a crucial detail is overlooked.
Resolve operational and tax matters
Plan final invoices, contracts, employee arrangements and registrations. Prepare the necessary accounts and tax work and consider how remaining funds should be dealt with. Do not empty the bank account without understanding creditor rights and the tax consequences of a payment to shareholders or directors. Create a working folder with the source records, the questions raised and the answer received. Check that names, addresses and periods agree across documents before anything is submitted. If the instructions are unclear, resolve that point with the relevant authority or a suitable adviser. A documented decision is easier to revisit when the business changes than an informal assumption.
Finish the legal process and keep records
Check eligibility for strike-off and who must be informed if that route is used. Monitor correspondence until closure is confirmed. Retain the records required after the company has ended and understand the consequences of leaving assets behind. Cancel recurring services only when they are no longer needed to complete the process. Assign a named person to the next action and record how completion will be evidenced. Keep accepted filings, correspondence and supporting calculations together. Revisit the arrangement when ownership, location or activity changes. Where more than one country or authority is involved, ask who will coordinate the work so each adviser understands the wider picture before relying on another person’s conclusions.
Check the official guidance
Rules and provider requirements can change. Check the current official guidance and seek advice on your circumstances before acting.
Can every company use voluntary strike-off?
No. Eligibility, solvency and liabilities must be assessed; some situations need insolvency advice.
Should I distribute remaining cash before reviewing liabilities?
Review creditors, tax and the proper treatment of distributions before paying out remaining funds.
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