Choose the company closure route
Start with whether your restaurant company can pay its bills. If it is solvent, voluntary strike-off may be suitable once it has stopped trading and selling trading stock for at least 3 months and meets the other conditions. A members’ voluntary liquidation (MVL) is another solvent route; an authorised insolvency practitioner takes charge as liquidator.
If the company cannot pay its debts, get insolvency advice promptly. A director can propose a creditors’ voluntary liquidation (CVL) if enough shareholders agree; an authorised insolvency practitioner takes charge as liquidator. Plan the restaurant handover or closure around your chosen company route. Work out the staff costs, lease balance and any guarantees before deciding what money is available.
Stopping the restaurant operation, selling it and dissolving its company are separate decisions. Identify who holds the premises licence, whether anyone will continue trading, and which contracts need ending or transferring. The sections below cover those decisions; use the companion guides for the licence and food-safety steps.
Meet the strike-off conditions and copy rules
Voluntary strike-off uses form DS01. You cannot apply if the company has traded or sold trading stock in the previous 3 months, changed its name in that period, is threatened with liquidation or has agreements with creditors. Activities needed to conclude its affairs, comply with statutory requirements or decide on and make the application are exceptions; paying an existing trading liability does not by itself count as trading. These closing-activity exceptions do not remove the trading or trading-stock restriction.
Within 7 days from the application date, give a copy to every person who was a member, creditor, employee, director, or manager or trustee of an employee pension fund on that day. The copy rule covers non-signing directors; directors who signed the application are excepted. Include your landlord, suppliers, staff or voucher holders where the company owes them money; check likely creditors too. Make a list before you apply so you can send the copies on time. The copy duty ceases if the application is withdrawn before that period ends.
Protect creditors when the company is insolvent
Your priorities shift from shareholders to creditors. Protect company assets, treat creditors equally and do not worsen their financial position. Directors are not normally personally liable for company debts, but wrongful trading and other mismanagement can create personal liability. Failing your legal duties can also lead to disqualification. Get professional advice before deciding what to pay, sell or transfer.
Plan staff notice, pay and any transfer
The notice and redundancy guidance, holiday rules, collective consultation and tips guidance in this section cover Great Britain. For staff in Northern Ireland, take local employment advice before dismissals or a business sale. Prepare a staff schedule showing start dates, contract notice, outstanding wages, unused holiday and any redundancy entitlement.
Statutory redundancy notice is at least one week after one month’s employment, then one week for each year between 2 and 12 years, and 12 weeks after 12 years. Contractual notice can be longer. Employees normally qualify for statutory redundancy pay after 2 years with the employer. You must include holiday pay for untaken statutory leave when employment ends. Pay final wages or salary, and pay through the notice period or in lieu of notice as the circumstances require.
If you propose 20 or more redundancies at one establishment within 90 days, collective consultation rules apply. Consultation must start at least 30 days before the first dismissal for 20–99 redundancies, or 45 days for 100 or more. You must also notify the Redundancy Payments Service at least 30 or 45 days before the first redundancy, respectively. With fewer than 20, there are no set collective rules, but full consultation is good practice.
If the business changes owner, TUPE may protect employees. Check whether staff transfer before assuming a sale means redundancy. If the employer is insolvent, eligible employees may apply to the government for redundancy, holiday, unpaid wages and statutory notice pay; the Redundancy Payments Service handles queries about those applications.
Qualifying tips and service charges must be passed to workers without deductions except limited cases such as income tax. Where you control or significantly influence distribution, allocate them fairly and transparently. Pay them by the end of the month after the customer paid. If you stop employing people, tell HMRC straight away and submit a final payroll return.
Resolve the lease and personal guarantees
Closing trade does not by itself end your lease: without an agreed early exit, rent can remain due for the rest of the term. Check the break clause’s notice period and conditions, including any payment conditions. You can ask the landlord to agree an early surrender, documented legally.
Assignment depends on your lease and requires the landlord’s permission; they may ask you to guarantee the new tenant. Subletting also requires permission and leaves the existing lease in place. Get property advice on the documents and any continuing obligations before agreeing a handover.
Check personal guarantees on the lease, supplier credit and borrowing: landlords, suppliers and lenders may request them. A personal guarantee makes you personally responsible for the covered debt if the company fails to meet its obligations. Do not assume closing the company or assigning the lease releases your guarantee. Ask your adviser to check its terms and obtain written release where one is agreed.
Transfer or surrender the premises licence
This premises-licence section covers England and Wales. Check any licence for alcohol sales or hot food and drinks between 11pm and 5am. Regulated entertainment can also need licensing, including films, live or recorded music and dancing. Some entertainment is exempt, including incidental music; councils can exempt some late-night refreshment too. Ask your licensing team which permissions apply to your restaurant.
If your company is the named holder, its licence lapses on dissolution or formal insolvency events. Those events include a company voluntary arrangement, administration, administrative receivership or liquidation; cash-flow difficulty alone is not this statutory trigger. Plan transfer before liquidation or strike-off dissolution if an incoming operator needs the licence.
If the licence has already lapsed, a qualifying applicant can apply to transfer it no later than 28 days after the day it lapsed. The application must include a request for immediate effect. Only one transfer application can be made under this rescue route. Where lapse follows the holder’s dissolution or formal insolvency, this route is available only if no interim authority notice is in effect. The licence is reinstated when the council receives that application, but lapses again if the applicant is notified of rejection or withdraws it. Contact the licensing team urgently.
An eligible incoming operator can apply to transfer the existing licence. If no one needs it, the holder can surrender by notice to the licensing authority, accompanied by the licence or reasons why providing it is not practicable. A valid surrender makes the licence lapse on receipt. Arrange the timing before sending the notice. For Scotland or Northern Ireland, contact the authority that issued your licence and a local licensing adviser before taking action.
Tell the food authority about closure
In England, Wales and Northern Ireland, register a food business with the local authority at least 28 days before trading. Scotland also requires registration with the council’s environmental health service at least 28 days before opening. Across the UK, this pre-opening registration period is separate from telling the council about closure.
In England, Wales and Northern Ireland, tell the local authority when you cease trading. For Scottish premises, contact your council’s food safety or environmental health team about closure; Food Standards Scotland lists local-authority contacts. Give the address, operator details and proposed closure or handover date, and ask what changes they need recording.
Close supplier accounts and deal with equipment
Check supplier and utility contracts, agree final invoices and tell providers your intended closure date. Check any hired equipment’s terms and arrange its return or settlement. Update your website, booking services and listings so customers know the restaurant is closing.
If you hold TheMusicLicence, PPL PRS says it terminates at the end of the current licence year if you write at least one month beforehand. Check your terms and tell them your closure date. Ask the council or rates authority whether business rates remain due on the premises.
Before applying for strike-off, deal with company-owned equipment and the bank balance; assets left when the company is struck off pass to the Crown.
Finish VAT and company steps
If the company is VAT-registered and stops being eligible, cancel registration within 30 days. Submit a final VAT Return covering the period up to and including the cancellation date. Account for stock and assets on that date if you reclaimed or could have reclaimed VAT when buying them and the total VAT due on those assets is over £1,000. Check the cancellation date and final return with your accountant.
Complete the remaining company and tax steps for your chosen route before finishing the closure. Keep the licence, employment and property advisers informed of the timetable so notices and handovers happen in the right order.