We’ll cover the process and procedure by which a winding up petition unfolds, and what the options are for company directors.
3 Way to Wind Up a Limited Company
(1) Striking Off
When a company has no debt and no assets it can simply be removed or ‘struck off’ the Companies House register. This method is known as striking off, dissolving a company or simply dissolution. It comes with a simple £10 fee for submitting Form DS01.
NB, this method cannot be used for a company with either assets ot debts.
Voluntarily winding up an insolvent company is known as creditors voluntary liquidation. Or where it’s instigated by a creditor for non payment of debts it’s known as compulsory liquidation.
In both cases, a licensed insolvency pracitioner sells assets, and uses realised cash to pay creditors in order of priority.
(3) Members Voluntary Liquidation
Solvent liquidation, known as a members voluntary liquidation must again be carried out by an insolvency practitioner (IP) The IP sells assets then realises them for the shareholders. There tax benefits to this method know as Entrepreneurs Relief.
How Much Does it Cost to Wind up a Company?
- Court fee for a winding up petition = £1,880
- Process server fee = £100 approx
- Advertising a petition in the Gazette £74.50
- Solicitors fee £500-800 to lodge the petition approx
Need Help or Advice?
If your company is being petitioned, you will need to speak to us with the swiftest urgency, as the closer it comes to the 7 day time limit, the less chance there is to find an alternative to compulsory liquidation. If you want free, confidential advice contact us via the live chat, phone or email.