If you want to close a solvent company the cost will depend on its size. If the business is small then the work required will be limited which is reflected in the cost. If it is more complex perhaps with a number of employees the costs will rise.
- What costs are involved with closing a solvent company?
- How much will a Liquidator charge?
- Is there a cheaper alternative to Members Voluntary Liquidation?
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The directors cannot complete a Members Voluntary Liquidation themselves. They will need to appoint an Insolvency Practitioner who will take on the role of Liquidator. The liquidator is responsible for collecting any debts owed by the company, selling its assets and ensuring all creditors are paid in full.
If the company is small with relatively few assets and employees the costs charged by the Liquidator can be as low as £2000 + VAT. If there are more assets and employees who need to be made redundant the costs will increase. The money to pay these costs will come from the company itself.
The directors must not take any company assets without paying a fair price for them. If they want the assets a proper valuation and sale and purchase agreement must be drawn up. The appropriate price must then be paid to the company once the Liquidator is appointed.
Is Strike Off cheaper than Members Voluntary Liquidation?
If your company is small you might be able to avoid the cost of a Members Voluntary Liquidation (MVL). Instead you could simply apply for the company to be struck off. If your company qualifies this can be achieved for far less than the cost of MVL.
To qualify for the Strike Off process the company must meet certain criteria. Most importantly it must be dormant. In addition it is not allowed to have any assets and should not have any debts.
Where a company is still trading and has assets and creditors it cannot just be struck off. A Liquidator must be appointed. If this does not happen and the company is unable to pay its debts the Directors may be considered guilty of wrongful trading. They may then be subject to further investigation by the Insolvency Service.