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A few key factors are involved in understanding how to close a limited company, such as your motivation to close it. One reason can be your company’s inability to pay its debts, or the directors want to close it, no matter if the debt is paid. Also, you can be thinking about retiring and want to free up the existing company and its assets for a new limited company formation. Similarly, you may want to close the company because it is not serving its purpose, or the business is not working as per your expectation.
Perhaps, your limited company is not as profitable as you would have liked, or the directors have agreed to closure. No matter the reason, if you want to close your UK limited company, here is a detailed guide for you!
Closing a UK Limited Company with a Strike Off
In case your limited company requires a closure, the best and most efficient way to do so is through a strike off. You can strike off your company through applying for a form called a DS01 form, leading to a voluntary strike off. A compulsory strike off may take place when a third party has petitioned to close your limited company. It can either be the Companies House who petitions for the closure of your company due to failure of paying corporation tax, annual statements, amend return accounts. In such a situation, your company can navigate a strike-off.
Closing a Private Limited Company That Never Traded
In case your private limited company has never traded or is dormant, its closure must be straightforward. If your company has outstanding liabilities but has never traded, liquidation would be inappropriate. However, you can consider an application for dissolution first gazette of the company. An application for dissolution for your limited company is appropriate in case the company has never traded. It might not have any contingent liabilities and assets.
Closing a Limited Company with Debts
In case you think that your UK limited company won’t be able to pay its debts and you decide to close it, liquidation can be a way to restart your business. You can seek services of a limited company accountant to help you get rid of outstanding debts, and ease relationships with creditors, or improve your reputation. So, it is a route you can consider taking.
Taking this route can prevent directors from a new limited company formation for escaping their debt. A new company emerging from the liquidation of an old company with similar directors and assets is known to be a phoenix company. There are two ways an insolvent company can carry out liquidation, including a Compulsory Liquidation and a Creditors’ Voluntary Liquidation (CVL). If you want to close your UK limited company, or you have gone through a strike off and faced strike off suspension by HMRC, we are there to help you at taxaccountant.co.uk. Don’t hesitate to contact our tax advisers for professional and legal advice!
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