My Company has Failed: From Winding Up to Bouncing Back

When you first start your company, its not likely that youre planning for its end of life. However, circumstances change, and there may come a time when youre no longer able to run your company. There are many reasons why a company can fail including unforseen competition, added complications or even a change in personal circumstances, to name a few.

Recent research by AvidPanda has found that 40% of new companies have closed in the last 5 years (2020-2024), meaning there's a good chance that you're not alone if you're feeling as though your company is going nowhere.

If your company is showing signs that its not sustainable in the long run and youre wondering what the next steps are, weve compiled some useful advice for you: from how to wind up your company to how to bounce back.

How Do I Legally Close My Failed Company?

The process of closing a failed company is called dissolution. There are several different forms this can take, depending on the reason why the company is closing.

The next few steps detail how you can close your company because you want to, rather than when youre forced to do so due to bad debt. If you need more information about the different types of liquidation, check out our previous post: I'm Scared of Liquidation - Should I be?.

If the company is still solvent, in other words, able to pay its bills, then you can strike the company off the Register of Companies through Companies House. However, there are conditions your company needs to adhere to:

Your company has paid all its debts
Your company hasn't traded in the last 3 months
Your company hasn't changed its name in the last 3 months
Your company isn't under the threat of liquidation
Your company doesn't have any agreements in place with its creditors.
Your company hasn't engaged in any other activity except where it is necessary for:

making an application for striking off
concluding the affairs of the company
complying with any statutory requirement

If your company meets all of these requirements, then you can strike off the company.

The directors must complete the Form DS01 online with Companies House (a paper version is also available but should only be used if you cannot use the online application).

Within one week of filling in this form, the directors must ensure that all parties with a vested interest in the company have been informed of the decision, and have received copies of the application.

As long as there are no objections, Companies House will strike off the company within 3 months.

How do I come up with my next business idea?

After shutting down the failed company, you can concentrate on where to go next.

But don't rush into this headfirst; you need to take your time and consider your options. Start by assessing what went wrong with your old company, as well as what went right. Put a list together and try to connect the dots by asking why that particular thing didn't work. You can then use this list to steer your business idea forward and the areas you can try to replicate in the future.

Next, you'll need to think about what type of business you want to start. It may be similar to your old company, or it may be something completely new. If you're unsure about what to do, then you could start by compiling some ideas. This could be a new innovation or a company based on a current start-up idea. A useful approach is to consider the industries that interest you and those that don't. Then, from your "interested in" list, learn more about the trends within that industry and see if you can capitalise on any of them.

If you're still stuck for ideas, then think about the products or services that you use in your everyday life. Are any of them substandard, or could they be improved on? This could be a good place for you to start.

Once you've come up with your idea, you'll need to conduct extensive research into the area. This includes: market research, writing a business plan, thinking about financing, to name a few.

Registering your new company

Once you've thought of your new business idea, carried out the research and found that it's viable, it's time to register the company. You've already had experience of this, but for a quick reminder of the process and what you'll need, continue reading.

You'll need:

A company name
A registered office in England and Wales, Scotland or Northern Ireland
At least one company director
A shareholder or guarantor (depending on the type of company you opt for)
A memorandum and articles of association
Share capital of at least one share
A SIC code

01 Sep 2025 - Are there any small businesses I can start and run on my own?
28 Aug 2025 - Restoring a Dissolved Company
19 Aug 2025 - The Survey Says - Or Does It?
13 Aug 2025 - Can I run a business while bankrupt?
31 Jul 2025 - My Company has Failed: From Winding Up to Bouncing Back