Faulds is arranging for a petition to appoint a provisional liquidator.
The agency has suffered a run of misfortune this year with the loss of several key clients and the closure of its London office.
A spokesman from the agency said: \"We opened in London at the time of the economic downturn and this, coupled with the loss of a couple of key clients in Edinburgh, put too much strain on us. We therefore had no option but to close.
\"It is a very sad day. Over the years we’ve had some great clients and some very talented and capable staff. We’d like to thank them for their support , loyalty and commitment.\"
Faulds started 18 years ago and became the largest independent agency outside London by late 90’s.