You can choose to liquidate your limited company, which means that its assets are used to pay off its debts and any money left goes to the shareholders.
Your company ceases to exist after it’s been liquidated, of which there are two types:
Creditors’ Voluntary Liquidation: is where you choose to liquidate your company because it can’t pay its debts. The directors can choose a creditors’ voluntary liquidation if their company can’t pay its debts (or ‘insolvent’). Shareholders can voluntarily liquidate the company by voting and passing a special resolution to stop trading.
Once the resolution has been passed, the directors must pass a resolution for voluntary winding up and send it to Companies House within 15 days and they must advertise the resolution in the London Gazette within 14 days, or the Edinburgh Gazette in Scotland. The directors also need to appoint an authorised insolvency practitioner as liquidator who will take charge of winding up the company
Members’ Voluntary Liquidation:is an option for those whose company is solvent, and can pay its debts, but where the owners may wish to retire; they may wish to step down from the family business and nobody else wants to run it; the business has run its course or the company can pay its debts but the owners simply want to close it down.