Compare company closure and rescue options
There are seven main ways to close or rescue a UK company, and the right one depends almost entirely on two questions: can the company pay its debts, and is the underlying business viable? If the company is solvent, you can close it cheaply by strike off, or tax-efficiently through a Members' Voluntary Liquidation if it holds retained profit. If it is insolvent but the business is viable, a CVA or administration may rescue it. If it is insolvent and not viable, a Creditors' Voluntary Liquidation is usually the right, controlled close, typically costing from around £4,000 to £7,000 plus VAT. Trying to strike off a company that owes money usually fails and can create personal risk, because strike off does not clear debts. The table below compares all the options side by side on cost, control, what happens to the debts and whether the business keeps trading. Insolvency Service, gov.uk
| Option | Best for | Who keeps control | Typical cost | Effect on debts | Company keeps trading? |
|---|---|---|---|---|---|
| CVL | Insolvent company, no viable rescue | Liquidator (you start it) | ~£4k to £7k plus VAT | Written off after assets distributed | No, it closes |
| Compulsory liquidation | Forced on you by a creditor | Official Receiver | Met from assets | Written off after assets distributed | No, it closes |
| Administration | Viable business needing protection | Administrator | Higher; case-dependent | Restructured or repaid via the process | Often, or sold as a going concern |
| CVA | Viable business with historic debt | Directors (supervised) | Set-up plus supervisor fees | Repaid in part over 3 to 5 years | Yes |
| Pre-pack | Saving a viable business fast | Administrator | Higher; case-dependent | Old debts stay in the old company | Business continues under a sale |
| Strike off | Solvent or dormant, no real debts | Directors | Small filing fee | NOT written off; debts remain | No, it is dissolved |
| MVL | Solvent company with retained profit | Liquidator | Practitioner fee | All debts paid in full | No, it closes tax-efficiently |
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How to read this
Start with solvency. If the company can pay its debts, you are choosing between strike off and an MVL. If it cannot, you are choosing between rescue (administration or a CVA) and closure (a CVL), and viability decides which. Our route chooser walks you through it in a couple of minutes.
Strike off, CVL, administration or CVA: the decision tree
Three questions decide the route: solvency, viability, and how urgent the creditor pressure is.
- Can the company pay its debts?
- Yes, solvent
- Strike off (DS01). Solvent or dormant, no real debts. Cheap, but not while a petition is pending.
- No, insolvent
- Go to question 2.
- Is the underlying business still viable?
- No, not viable
- Creditors Voluntary Liquidation. An orderly, director-led close.
- Yes, viable
- Go to question 3.
- Need urgent protection from creditors, e.g. a winding-up petition?
- Yes, need protection
- Administration. The moratorium stops creditor action immediately.
- No, can repay over time
- Company Voluntary Arrangement. Directors keep control and repay over 3 to 5 years.
Indicative only; a Licensed Insolvency Practitioner confirms the right route for a company. Source: Insolvency Act 1986; Insolvency Service, gov.uk.
Head-to-head comparisons
If you already know the two options you're weighing up, these go into more detail on that specific choice:
- CVL vs strike off
- Administration vs liquidation
- CVA vs administration
- Liquidation vs dissolution
- Voluntary vs compulsory liquidation
Not sure yet whether the company is in financial difficulty at all? Start with our neutral company-in-trouble check.
Common questions
What is the cheapest way to deal with a company?
For a solvent, debt-free company, strike off is cheapest. For an insolvent company, a CVL is usually the most cost-effective proper route, because trying to strike off with debts tends to fail and can create personal risk.
Which option lets the business keep trading?
A CVA lets the company keep trading while it repays creditors over time. Administration can keep a business trading or enable a sale as a going concern. Liquidation and strike off both close the company.
How do I choose the right option?
It comes down to two questions: can the company pay its debts, and is the underlying business viable? Use our closure route chooser, then confirm with a Licensed Insolvency Practitioner.
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