Strike your company off or liquidation - YOU DECIDE

Although we don't advise this, lots of UK company directors opt to try and strike their ltd company off the register instead of appointing a licensed insolvency practitioner and going into liquidation.

If your business is struggling financially and you're looking at 2 options, one costing you ￡10 and the other ￡5,000 then you would be forgiven in thinking that the ￡10 option is going to be best. It may be a lot cheaper but before you attempt to strike the company off I'm going to give you a couple of things to think about.

1. REDUNDANCY PAY!!! If your company gets struck off the register you will not be able to make a claim for director redundancy. With the average claim being ￡9,000 you could afford to liquidate and still be ￡4,000 up. You need to have been registered on the PAYE scheme for the last 2 years and been working under an employment contract. This contract doesn't need to be a written one so don't worry.
2. NO CHANCE OF REINSTATEMENT - If you close via a creditor's voluntary liquidation your company is closed down for good in a legal and structured manner. If you strike a company off with debts it could still be reinstated by a creditor and the director could be held personally responsible for the company debts and may even get disqualified from being a director.

If you have taken a Bounce Back Loan it's highly unlikely that the bank that issued the loan will allow the company to be struck off.

As always if you have any questions please drop them in the comments below and if you have found this article useful like and share it for me.

I understand how difficult it can be for you when your business is in debt and you don't know where to turn, I've been there too. It's always easier to talk through the issues with someone who may be able to help, let me know if you would like some free, independent, no strings and no-obligation advice.

All the best,

Chris