A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
When do you know it's time to close your business?
There's rarely a single moment - closure creeps up through months of warning signs - but there are honest tests that turn a fog into a decision, and taking the decision early is what keeps it yours to take.
The financial tests
Does the business make money at the operating level - before historic debt, before your unpaid hours? A profitable core justifies rescue routes; a loss-making one means every month open increases what's owed.
Would the insolvency tests pass today - and would they pass after next quarter's VAT and rent?
And the investor question: knowing everything you know, would you put new money in at today's prices? If you wouldn't, keeping the doors open is doing exactly that, monthly.
The questions beyond the numbers
Whether the market moved permanently or cyclically; whether you'd start this business today; and the personal ledger - health, family, and the personal exposure growing with every guaranteed month.
Why early matters
Decide while solvent and the choice is wide - MVL or strike off, on your timetable; decide while marginal and an orderly CVL protects everyone; wait, and a creditor decides for you.
Closing well is a management skill, not a failure - and it's one conversation away from being planned rather than suffered.
Call our licensed insolvency practitioners in Manchester on 0333 023 5090 - free, confidential, and directly with an ICAEW-licensed IP.
InsolvencySupport.co.uk is operated by Xeinadin Corporate Recovery Limited (company no. 11415156), 8th Floor, 100 Barbirolli Square, Manchester M2 3BD. Our insolvency practitioners are licensed and regulated by the ICAEW.
This page is intended for general information purposes only and does not constitute financial, legal, or professional advice. Always take advice from a licensed insolvency practitioner about your specific position.