Ceasing to trade

There are more regulations that affect a company when it ceases to trade than is the case with a sole trader or a partnership. This is particularly true if a company trades when it cannot meets its liabilities as they fall due. Indeed, the directors can become personally liable to repay a company’s debts if they allow it to carry on trading when they know, or should know, that the company cannot meets its debts as they fall due.

Companies must be formally wound up if they are no longer required but merely because a company ceases to trade does not mean that it ceases to exist. As an alternative to a formal winding-up, straightforward cases can be dealt with using a Section 652 procedure on which we can advise.

We can advise you in the first instance if you are contemplating ceasing to trade, though it may become necessary to appoint a liquidator in certain circumstances to deal with winding up the company.