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 that cannot pay its debts should be closed through a Creditors Voluntary Liquidation handled by a Licensed Insolvency Practitioner, which deals with creditors properly and protects directors who act responsibly. 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. Our chooser tool walks you through the decision in a couple of minutes, and a practitioner can confirm the right path on a free call. Insolvency Service; gov.uk closing a company
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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 |
Match the route to the company
Use our closure route chooser to see which option fits your company, then confirm with a practitioner. 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 is not: 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.
The numbers behind this
See the live official figures on our strike-off objection tracker. How often the cheap closure route gets blocked by an objection. All figures come from named official sources on our UK business distress data hub.
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.