The Last Chapter: How Closing a Business Can Be the Right Exit
When Michael sat in his office one quiet Friday afternoon, he realised something: he no longer wanted to fight for a business that no…
When Michael sat in his office one quiet Friday afternoon, he realised something: he no longer wanted to fight for a business that no longer inspired him. For twenty years, he had run a family manufacturing company. It had been his pride and joy. But the market had shifted, costs had soared, and every year the margins grew thinner.
It wasn’t that Michael had given up — it was that he could see the reality clearly. Selling wasn’t an option; no buyer was willing to pay more than the value of the assets. His children had no interest in taking over. And he certainly didn’t want to wait for creditors to decide his future.
He needed a clean, controlled exit.
Deciding to Close — Not Give Up
Michael had always assumed “exit” meant selling the business or passing it down. But over coffee with a trusted adviser, he learned there was another route: closing the company in a way that was strategic, legal, and on his terms.
For some, this choice comes when:
- The business is no longer profitable.
- The market has shifted beyond repair.
- There’s no successor or interested buyer.
- Debts are mounting and stress is growing.
Michael realised he ticked more than one of those boxes.
The Two Roads Ahead
His adviser explained there were two main ways to close:
1. Members’ Voluntary Liquidation (MVL) — for companies that can pay all their debts. This route allows owners to extract remaining funds tax-efficiently and formally dissolve the business.
2. Creditors’ Voluntary Liquidation (CVL) — for companies that can’t meet their debts. This ensures creditors are treated fairly and directors meet their legal obligations.
Michael’s company was still solvent, so an MVL was his path.
Meeting the Insolvency Practitioner
An insolvency practitioner (IP) became Michael’s guide through the process. Over the course of a few meetings, the IP explained their role:
- Assessing the financial position.
- Valuing and selling assets.
- Distributing funds to shareholders or creditors.
- Handling all communications with creditors.
- Closing the company legally with Companies House and HMRC.
“It’s about doing this by the book,” the IP told him. “That way, you can walk away with your reputation intact and no loose ends.”
The Final Steps
The process unfolded step-by-step:
- Decision Made — Michael and the board passed a resolution to wind up.
- Asset Sale — Machinery, stock, and the company van were sold.
- Distribution — Remaining funds were paid out to shareholders.
- Dissolution — The company was removed from the register.
It was systematic, structured, and far less stressful than Michael had feared.
Walking Away on His Terms
When the paperwork finally came through confirming the company was dissolved, Michael felt something unexpected — relief. He wasn’t walking away in defeat; he was closing a chapter that had run its course.
He could now focus on new ventures, free from the pressure of trying to keep an unsustainable business alive. And he knew he’d handled it in a way that protected his employees, his creditors, and his own integrity.
