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Director Duties When Closing a Company

Anderson Brookes Insolvency Practitioners help directors close limited companies quickly, legally and with expert guidance every step of the way.

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Why Director Duties Matter

Limited companies are separate legal entities. This protects directors from personal liability in many situations, but only if legal obligations are followed, especially when a company is closing.

Failing to act correctly can lead to disqualification, personal financial responsibility, and even criminal charges in serious cases. That’s why understanding and following your responsibilities is vital.

When it’s time to close a limited company, directors have clear legal responsibilities to follow. These duties depend on whether the company is solvent or insolvent and are designed to protect creditors, shareholders, and the public.

At Anderson Brookes, we work with directors across the UK to make sure the process is handled correctly. We provide practical guidance that helps you avoid costly mistakes, stay compliant, and close your business with confidence.

Director Duties in a Solvent Company Closure

If your company is solvent, meaning it can pay all its debts, you may be able to close it via voluntary strike off or a Members’ Voluntary Liquidation (MVL).

In either case, directors must:

  • Confirm the company is genuinely solvent, including any future or contingent liabilities.

  • Ensure all debts, taxes, and obligations are settled.

  • Keep full records up to the point of closure.

  • Notify all relevant parties – including creditors and HMRC – if applying for strike off.

  • Sign a Declaration of Solvency if proceeding with an MVL.

If the company is struck off without settling all obligations or without proper notice, directors may become personally liable.

If your company can’t pay its bills, your responsibilities shift immediately. You must:

  • Stop trading straight away – continuing to trade when insolvent can lead to wrongful trading claims.

  • Prioritise creditors’ interests – no more payments to shareholders or directors.

  • Avoid preference payments – do not favour one creditor over another.

  • Preserve all company records – don’t hide, destroy, or alter financial data.

  • Work with a licensed insolvency practitioner (IP) – only an IP can legally manage an insolvency process.

Failing in any of these areas could mean you’re personally liable for losses and face director disqualification for up to 15 years.

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Key Responsibilities at a Glance

DutyApplies toWhat It Means
Act in good faithAll companiesDecisions must be made honestly and in the best interests of the company.
Stop trading if insolventInsolvent onlyTrading while insolvent risks legal action and personal liability.
Keep accurate recordsAll companiesMaintain detailed, up-to-date accounts, contracts, and correspondence.
Declare solvency (MVL only)Solvent (MVL only)You must confirm the company can repay debts within 12 months.
Avoid preference paymentsInsolvent onlyDo not favour one creditor over others.
Cooperate with insolvency IPInsolvent onlyYou must provide full information and support to the liquidator.

 

Testimonials

Our clients praise our professionalism, reliability, and the exceptional support we provide during challenging times, helping thousands of company directors through insolvency, liquidation, and business debt solutions.

"We had the unpleasant, highly stressful experience of being the Directors of a business that was beyond help, despite our best efforts. Jon was absolutely brilliant, going way above and beyond. Not only was Jon a professional, knowledgeable person helping us go through the process of a liquidation, but he was also a safe pair of hands, and an empathetic voice to discuss even the tiniest detail with. He never rushed us, he used language that we understood and he was an excellent communicator. Jon made a very stressful, upsetting time feel manageable and in control."
Madeleine Cole
"It has become very unfortunate that the company has had to go into administration. Anderson Brookes have bee efficient, reactive to our needs and totally communicate every step of the way. The experience whilst personally been painful to have to make such a decision, the company dealing with these affairs have acted professionally and been responsive to our questions."
Derek Clarke
"Fantastic service and company from start to finish. Isabel Cross looked after my case she was very informative, professional, reassuring and reliable. I cannot thank you enough!"
Marianne YatesCEO
"From the first call I received from Anderson Brookes I was very impressed with how friendly and professional they were. I agreed to take them on to liquidate my company and very pleased with my decision. All done and dusted in very quick order."
Lynne BullCEO
"First Class Company, Friendly, Knowledgeable, Caring, Most Helpful And Give Great Peace Of Mind. They Took All The Worry And Weight Off My Shoulders And Gave Me Great Peace Of Mind To Let GoOf My Problem. Thank You Ever So Much Rebecca Marsden And Her Team.
Ray Gowrie
"Amazing company who conducted our liquidation very thoroughly and professionally, I was fortunate enough to have Jon Rudd as my case manager who helped me every step of the way. Highly recommended and a big thank you to you Jon!"
Lewis Beaumont
"With the help of Anderson Brookes I now have a massive weight of my shoulders. They were very helpful from start to finish."
Andrew Colley
"Great service. I wish I got in touch earlier. I'm finally getting some proper sleep. Thank you to Emmie and the team 🙏"
Vie Sidibe
"I used Anderson Brookes when I got into bother with my ltd company. After getting other prices and talking with different companies I felt happiest with these. Great service helped throughout and any questions I had (I had a lot) they were more than happy to answer and put my worries at ease. Top marks thank you to everyone that has helped"
Luke Singleton
"I was assisted every step of the way by Rebecca and her team. Eddy was very helpful through the entire process. I would highly recommend Anderson Brookes to anyone going through a similar situation to me."
James Cockney
CVL costs

What Happens If You Don’t Follow the Rules?

If a director fails in their duties, the consequences can be severe:

  • Personal liability for company debts

  • Director disqualification for 2–15 years

  • Fines or civil claims from creditors

  • Criminal prosecution in cases involving fraud or misconduct

Take Action Early

The earlier you speak to a licensed insolvency practitioner, the more options you’re likely to have. It can mean the difference between a smooth, compliant closure and serious personal consequences.

At Anderson Brookes, our team of regulated, experienced insolvency professionals is here to help you understand your position, weigh your options, and take the right steps.

Speak to a Licensed IP Today

If you’re considering closing a company, get in touch now for clear, confidential advice:

There’s no obligation and no pressure – just expert support from professionals who understand what directors need.

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Steven Kendall-Torry
Steven Kendall-Torry
Having to shut down your business is a very emotional and scary journey and although you think you’ve done everything correctly there’s always something you get wrong , small print , and rules one is unaware of which can surprise bite you on the bum and ruin your day ! We were fortunate to have Laura , Katie and the background Riki who considering they have a fairly thankless job to do they were always polite , very patient , and as helpful as they could be considering they generally were giving bad news which was rarely expected or welcome. Altogether they were good listeners and helpful we had to understand they still had to follow rules and a job to do and they managed the balancing act extremely well. Many thanks
Madeleine Cole
Madeleine Cole
We had the unpleasant, highly stressful experience of being the Directors of a business that was beyond help, despite our best efforts. Jon was absolutely brilliant, going way above and beyond. Not only was Jon a professional, knowledgeable person helping us go through the process of a liquidation, but he was also a safe pair of hands, and an empathetic voice to discuss even the tiniest detail with. He never rushed us, he used language that we understood and he was an excellent communicator. Jon made a very stressful, upsetting time feel manageable and in control.
Harvey J
Harvey J
Efficient and Professional Experience Two words to describe the experience: efficient and professional. No doubt you can appreciate that it’s a very stressful time for directors, but from my initial telephone conversation with Mike, and the decision to enter into a CVL, the process from start to finish was completed within two weeks. In addition to Mike, I would also like to mention the professionalism of the two other members of the AB team, Steve and Emmy. Worth mentioning as well that, where it was possible, the lines of communication were via WhatsApp which again massively improved and streamlined the whole process.
Derek Clarke
Derek Clarke
It has become very unfortunate that the company has had to go into administration. Anderson Brookes have bee efficient, reactive to our needs and totally communicate every step of the way. The experience whilst personally been painful to have to make such a decision, the company dealing with these affairs have acted professionally and been responsive to our questions.
Vie Sidibe
Vie Sidibe
Great service. I wish I got in touch earlier. I'm finally getting some proper sleep. Thank you to Emmie and the team 🙏
Andrew Colley
Andrew Colley
With the help of Anderson Brookes I now have a massive weight of my shoulders. They were very helpful from start to finish.
Lynne Bull
Lynne Bull
From the first call I received from Anderson Brookes I was very impressed with how friendly and professional they were. I agreed to take them on to liquidate my company and very pleased with my decision. All done and dusted in very quick order.
Ray Gowrie
Ray Gowrie
First Class Company,Friendly, Knowledgeable, Caring, Most Helpful And Give Great Peace Of Mind. They Took All The Worry And Weight Off My Shoulders And Gave Me Great Peace Of Mind To Let GoOf My Problem. thank You Ever So Much Rebecca Marsden And Her Team.
Andrew P
Andrew P
They are amazing in what they do, affordable fees compairing to other brookers, helped me with a LTD insolvency, i am over the moon with their services, would highly recommend. They are really knowledgable and straight forward.
Lewis Beaumont
Lewis Beaumont
Amazing company who conducted our liquidation very thoroughly and professionally, I was fortunate enough to have Jon Rudd as my case manager who helped me every step of the way. Highly recommended and a big thank you to you Jon!
Jaspreet Singh
Jaspreet Singh
Mr Rikki Burton and team are very professional, efficient and patient. The work conducted was very smooth and the transition Was without any hiccups. They gave time to put evidences upfront to support the liquidation. Great communication and highly recommended.
Luke Singleton
Luke Singleton
I used Anderson Brookes when I got into bother with my ltd company. After getting other prices and talking with different companies I felt happiest with these. Great service helped throughout and any questions I had (I had a lot) they were more than happy to answer and put my worries at ease. Top marks thank you to everyone that has helped
James Cockney
James Cockney
I was assisted every step of the way by Rebecca and her team. Eddy was very helpful through the entire process. I would highly recommend Anderson Brookes to anyone going through a similar situation to me.

Contact us today

As licensed insolvency practitioners, we provide regulated business debt advice and support for company directors.