This video outlines all you need to know about closing both an active and inactive company… We will also give advice on the solution options available in relation to your specific situation and requirements. Company Dissolution, or winding up is the simplest way to close an unneeded company. There are a whole host of reasons why you may be considering this option; your business may have been successful but has now served its purpose, or maybe it never got off the ground where it has been sitting dormant ever since. Accountants and other professional advisers. HM Revenue & Customs (HMRC) are responsible for collecting taxes from companies and individuals, but what happens if YOUR company owes them money? This includes updating changes to the company's details and paying lodgement and annual review fees. However, if you have had a dormant company from the date of registration — in which case HMRC will class it as “inactive” — then it will not be susceptible to tax liabilities like VAT, PAYE, or corporation tax. Generally, an application for Striking Off would be appropriate when a company has never traded. What should I do if my limited company goes bankrupt? Under the Companies Act 2014, this procedure has been placed on a formal setting. We offer supervised dissolution services to bring companies to a close through a strike off from Companies House. If Companies House has decided to dissolve your limited company. an initial loan), then liquidation may be an appropriate process. To be eligible, the company must satisfy all of the following requirements: has not traded or carried on any kind of business within the last 3 … Pros and Cons, 4 Most Tax Efficient Ways to Take Money Out of a Company, What to Do When Forced to Work Night Shift Against Your Will, How Much Do Plasterers Earn in UK? Note that as long as you can evidentially and legally declare that your company has never traded and indulged in capital gains from trading products or selling business assets, you will be exempt from paying any sort of business tax. Closing a limited company with debts – everything you need to know. If it has outstanding liabilities but has never traded (i.e. Not only does the liability protection no longer apply, the company is still responsible for any all taxes and fees while the company is inactive. Before that can happen, financial reports up to the date of cessation must be prepared and filed and any outstanding Corporation Tax paid. The company must not have traded in the last 3 months nor changed its name and you are expected to have informed HMRC – they will expect final accounts to close of trade and for any taxes to have been settled. If you are considering dissolving your company, just note there are requirements and obligations you are expected to fulfill. Thanks (0) a company that never traded, is a simple process. If you’re facing the worst-case scenario of your business being unable to, If your business is struggling with debt, remember there are plenty of, If your business is failing due to debts becoming unmanageable, liquidation may. You should be sure that you have not traded for at least three months and that you have no outstanding legal or insolvency procedures against you. In addition, you may continue to receive correspondence from HMRC at your registered office address if you do not finalize and confirm your company status. However, as a Company that never traded, you simply need to inform: Additionally, if there are a co-director and additional shareholders, they are expected to be informed in writing and be sent a copy of the application for striking off, Form DS01. The harsh reality is that very few businesses last forever and there may come a time when you may need to consider dissolving your limited company. The way you close the company depends on whether it … All you need to do is to complete form DS01 and send it to Companies House. Know Who to Inform A lot of limited companies with long and complex trading histories that have creditors and perhaps numerous shareholders and directors, have to inform a long list of people who have been associated with the company. Call Us On: 0333 772 1808 | FREE from ANY phone. Note that only when all the payments have been made should the bank account be closed. You may be preparing to retire, want to free up assets from an existing company to fund a new venture or want to close a subsidiary company that no longer serves a purpose? How Long Can a Subcontractor Work for a Company in UK? Suite 3,91 Mayflower Street, Plymouth,DevonPL1 1SB, Suite 100,45 Salisbury Road,CardiffCF24 4AB, Suite 14,98 Woodlands Road, Charing Cross, Glasgow, Scotland G3 6HB, Suite 20,21 Botanic Avenue, Belfast,Northern Ireland BT17 1JJ, Telephone: 0333 772 1808Email Us: office@futurestrategy.co.uk, Future Strategy Limited is authorised and regulated by the Financial Conduct Authority (FCA). Closing a limited company that has never traded is quite a fairly simple process as long as the majority of the company’s directors agree with the closure. There are three possible routes to consider when closing a limited company: Voluntary Strike Off. If you have not sent a CT41G form to HMRC to inform them that your company is dormant, it is likely you will receive a notice to complete a corporation tax return. However, I never recommend leaving a company in “inactive” status. If you have any creditors then these must be told prior to the application and a copy of the strike-off form must be sent to them within 7 days of it being filed. List of Private Label Hair Products / Companies in UK, 12 Photography Franchise Opportunities in UK and Their Cost, HMRC (for corporation tax, payroll, and VAT purposes). How to inform HMRC that your company is dormant A company application for Striking Off could also be considered. Read more about Company Strike Offs here. If there are any remaining assets in the business, such as cash in the bank account and tangible assets, such as computers or furniture, these can be paid to the shareholders as a final dividend, likely in practice to be the contractor. In order to be accepted for a strike off from Companies House, a company must not have traded in the 3 months prior to the application. Therefore, within nine months the company will be struck off and cease to exist. This article comprehensively outlines all you need to know about closing both an active and inactive company… If you wish to keep the dormant company, then you will need to file accounts and submit the annual return. Failing to do so will result in the Crown owning the said assets at the date of dissolution. Voluntary Strike Off (Close A Company) € 390.00 € 279.00 (ex. But what if your limited company has never traded? Perhaps you can no longer afford to pay debts, or directors have agreed on closure? Company accounts are all expected to be prepared for the period from the last annual accounts to the final date of trading. There are a number of reasons why you might want to close a company. 2. How to close a limited company. If you would like to know more, contact the Future Strategy team today. an initial loan), then liquidation may be an appropriate process. Have it in mind that any final balance of PAYE tax and National Insurance Contributions should be paid. Before we outline how to close a limited company that never traded, an alternative method to closing a limited company that has traded is through members’ voluntary liquidation. Legal Requirements for Storing Business Information, How to Deregister from VAT in UK? Prepare your final accounts and company tax return. Our initial consultation is FREE. Here’s how to close a limited company that has never traded. A company that ceases to trade, or has never traded, and has no outstanding creditors can request that the Registrar strike off the company. If it has outstanding liabilities but has never traded (i.e. How to Close a Limited Company Without Paying Tax. If your company is solvent and has fulfilled its purpose you can apply to Companies House to have your company removed from the register and closed. An ‘informal’ liquidation or ‘winding up’ of your company can be made by simply applying to Companies House to strike your company off the register. Once the directors have agreed, submit the application for Strike Off using form DS01. If you think you might want to trade through your limited company again soon, you always have the option of putting it “on hold”. You would also have to inform HMRC that the company has quit trading and that it should be deregistered for VAT. A business can be referred for deregistration upon request from the company or close corporation or any other third party, provided that the company or close corporation has ceased to carry on business; and has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company or close corporation being liquidated. Also, note that any payments due to HMRC and other creditors should be made from the company bank account. Yes – Registering a limited company is the only way of protecting the company name; otherwise, the name could be used by someone else in order to form their company. A lot of limited companies with long and complex trading histories that have creditors and perhaps numerous shareholders and directors, have to inform a long list of people who have been associated with the company. If your limited company is dormant or has never traded, closing it should be straightforward. How to Dissolve a Company That Never Traded. You don’t have to file final accounts with Companies House. You can only have your company struck off the Companies Registrar if: Your company hasn’t traded or done any business in the last three months It is a common misconception that companies with debts cannot be dissolved, this is in fact possible. Additionally, if there are significant reserved funds in the company (more than £35,000) then a Member’s Voluntary Liquidation (MVL) is a tax efficient route of extracting the cash with only 10 percent tax paid. Additionally, the longer a company stays in inactive status, the more penalties and late fees generally accrue. If you are in the position in which you need to close your limited company, there are several steps involved.I will explain these steps based on the financial situation of the company at the time of closing, and what needs to be done to either make your company dormant or arrange for liquidation or dissolution. Closing a limited company that has never traded. If you think you might want to trade through your limited company in the future, you always have the option of putting it ‘on hold’. Make your limited company dormant. Closedforbusiness.ie gives you access to a panel of experienced Liquidators nationwide. Dissolving a dormant company i.e. This is because it is likely to have no assets and no current or contingent liabilities. The Inspector of Taxes for the company’s payroll should be informed that the company has ceased trading and HMRC will issue a final P35 Employer’s Annual Return, which the business owner will need to complete and return. Here at Future Strategy, we guarantee to strike off your limited company for a fixed fee, from as little as £99 +VAT. In addition, it is recommended to contact HMRC for confirmation of your company status and understand whether closing your company has resulted in/will result in any untoward implications. Closing a limited company that has never traded is quite a fairly simple process as long as the majority of the company’s directors agree with the closure. You need to write to them and ensure that they do … Can Sole Traders Get Business Grants in UK? 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