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When is the Right Time to Liquidate a Company?

For a Solvent company (can pay its debts and has cash or assets remaining)

  • Tax is often a big factor in when it is time to liquidate
    • Which tax year does a personal capital gain fall into?
    • Is a budget review due that may affect tax rules for the future?
    • What other personal capital gains fall within the relevant tax year?
    • Is there a time restriction on the application of Entrepreneurs’ Relief (a personal tax relief)?
  • Are you starting a new full-time role and won’t need your company?
  • Has your business just been sold?
  • Are you considering retiring from your business?

For an Insolvent company (can’t pay its debts and owes more than it owes)

  • A winding up petition is being threatened or has been presented against the company
  • The outcome of a court case is expected to go against a company, and it can’t pay the likely award
  • The business of the company is no longer workable
  • A company will not be able to pay the wages for its staff
  • A landlord is going to act against the company
  •  Action is being taken by those owed money by the company to recover money
  • A business has had to cease suddenly due to unexpected circumstances

Insider Tips:

The above are some example. Every situation is different. We will need to understand those factors to be best able to help you.

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