It is possible to dissolve a company with a Bounce Back Loan. However, it’s highly likely that, as the debt is unsecured, the dissolution would be objected to. To close a company with an outstanding Bounce Back Loan, it should go through the correct closure procedure: a Creditors Voluntary Liquidation (CVL). 

Dissolving a company 

Dissolving a limited company is used for companies that have no outstanding debt, and simply want to strike the company off from the register of companies at Companies House. 

A company can only be struck off if: 

• It hasn’t traded or sold off any stock in the last 3 months. 
• It hasn’t changed any names within the last 3 months. 
• It isn’t threatened with liquidation or has any repayment agreements with creditors. 
• The company is not subject to prosecution or disqualification.
• The pension scheme has been finalised.

What happens if you dissolve a company with a Bounce Back Loan? 

If you try and dissolve a company with a Bounce Back Loan, or any other debts for that matter, it’s likely that it will be objected to, which is known as ‘Objection to Company Strike Off Notice’.

When applying for a strike-off, it will first be advertised in the London Gazette, which will notify creditors of their chance to object. As a director, you would also have to write to any outstanding creditors, including HMRC of your intentions to dissolve the company and have it struck from Companies House. 

Creditors can also restore a dissolved company via a court order for up to six years after the dissolution if they have a valid reason to.

Can I close a company with a Bounce Back Loan?

You can close a company with a Bounce Back Loan, as they are classed as a debt just like any other. Although they don’t have a personal guarantee as part of them, it does not change anything else. A limited company with a Bounce Back Loan has to be closed down in the right way, which does not mean striking it off.  

• Creditors Voluntary Liquidation
  To close a limited company with a Bounce Back Loan, you will need to proceed in the correct way through the process of a Creditors Voluntary Liquidation. We are licensed insolvency practitioners and can assess your situation and put your company through the correct procedure.
  Read more about Bounce Back Loans in liquidation

How we can help 

If your company is facing financial difficulties and you’re worried about an unpaid Bounce Back Loan, it’s important that act quickly. We provide free, confidential advice and can help you look through the options that are available to your company. 

1. Speak with our initial advisers through phone or online chat.  
2. After an initial assessment, we will identify if your company is viable for liquidation.  
3. We will propose to you the liquidation of your company and undertake the necessary steps.  

All advice is free of charge. If a liquidation is viable, it will result in the formal closure of your company, and any unsecured debts will be written off. 

In summary 

You shouldn’t try to dissolve a company with a Bounce Back Loan. A dissolution is meant for companies that have stopped trading, have no money left in their accounts, and no unpaid debts. A company with an unpaid Bounce Back Loan, as it is an outstanding debt, should go through the proper procedure of a Creditors Voluntary Liquidation (CVL) in order to close its doors. 

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