How to close a UK company
How you should close a UK company depends almost entirely on one thing: whether it can pay its debts. A solvent company with no significant liabilities can be closed cheaply by strike off using form DS01, or, if it holds retained profit, more tax-efficiently through a Members' Voluntary Liquidation. An insolvent company should be closed through a Creditors' Voluntary Liquidation handled by a Licensed Insolvency Practitioner. Insolvency Service; gov.uk closing a company
- The deciding question
- Can the company pay its debts?
- Wrong route risk
- Striking off with debts can trigger objections and investigation
- Ceased trading?
- The company still exists until it is properly closed
Talk it through, free and confidential No obligation. We review your situation and point you to the right next step.
At a glance
| Your company | Right route | Why |
|---|---|---|
| Solvent, little or no retained profit | Strike off (form DS01) | The cheapest route when there are genuinely no creditors |
| Solvent, significant retained profit | Members' Voluntary Liquidation | Distributions are usually treated as capital, often more tax-efficient |
| Insolvent | Creditors' Voluntary Liquidation | Deals with creditors properly and protects directors who act responsibly |
| Insolvent, but the business is viable | Rescue first | Administration or a CVA may save the business: see business rescue options |
Match the route to the company
Trying to strike off a company that owes money usually fails, because creditors and HMRC object, and it can expose directors to investigation. The wrong route is not just inefficient: it can create personal risk. A Creditors' Voluntary Liquidation deals with creditors properly and protects directors who act responsibly.
Our closure route chooser walks you through the decision in a couple of minutes, and a Licensed Insolvency Practitioner can confirm the right path before anything formal happens. If there is any doubt about solvency, apply the insolvency tests first, because that single question drives everything else.
Ceasing to trade is not the same as closing
Many directors cease trading and assume the job is done. It isn't: a company that has ceased trading still exists at Companies House, still owes its filings, and its debts remain live. If you want to cease trading permanently, follow through to a proper closure, strike off or liquidation depending on solvency, so nothing is left to come back at you. A company that has ceased trading but cannot pay its debts should go through a CVL, not be left to drift; a solvent one that has genuinely finished can be struck off after its affairs are settled. If you might trade again, the alternative is making the company dormant instead of closing it.
Related data
Our strike off objections guide: How an objection can block the cheap closure route. Every page on our data hub names its official source.
Common questions
What is the cheapest way to close a company?
For a solvent, debt-free company, strike off via DS01 is cheapest. But cheap is only right if the company genuinely has no creditors. With debts, a CVL is the proper route even though it costs more.
Can I just stop trading and let the company lapse?
Not safely. You still have filing duties, and an insolvent company left to drift can be wound up by a creditor and your conduct investigated. Close it properly.