A checklist for when you are closing down your limited company
If you are thinking of closing down your limited company by voluntarily striking it off the register at Companies House, a process also called company dissolution, you’ll need to take a series of actions prior to submitting the application.
To be eligible for dissolution your company will need to be solvent. Below is a checklist of considerations when closing a company - whether they are all applicable will depend on the type of business you run.
Initially, however, you must not:
Trade or deal with company assets for three months prior to making your application
Change the limited company name during these three months
Be involved in any formal agreements with creditors
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When you are looking to close down your limited company, here is what you must do:
HMRC will need to know of your plans for closure, and that you have ceased trading.
File all statutory accounts and returns
Submit your annual returns and accounts to HMRC, letting them know they will be the final submissions prior to dissolution. You will then be informed of how much the company owes in corporation tax.
Pay tax liabilities
Pay your corporation tax bill, plus any outstanding liabilities for VAT, PAYE and National Insurance.
Close down the payroll scheme
Once all your employment-related payments have cleared, and P45s have been sent to all employees and directors, you can request that HMRC closes down your payroll scheme.
Ensure all loans, leases and HP agreements are dealt with
You need to pay all your trade suppliers, repay any business loans and leases, and end all hire purchase agreements.
Consider redundancy payments
Your staff may be eligible for redundancy and other employment-related payments, such as outstanding wages and holiday pay.
Close your bank accounts
Once you have made all the necessary payments, you should close the company’s bank accounts.
Cancel VAT registration
You’ll need to de-register with HMRC for VAT (this can be done online).
Apportion assets among shareholders
If you fail to apportion all your company’s assets among the shareholders, and they remain under the company name once the dissolution process starts, they will become the property of the Crown.
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Apply for dissolution
Applications can be made using Form DS01, which is downloadable from the internet. The form must be signed by a majority of directors, and submitted with the £10 fee.
Inform all parties connected to the company
A crucial part of this process is informing anyone connected to the business of its closure. This might include suppliers, employees, the bank, HMRC, and any director who didn’t sign the application form.
The process allows for creditors to come forward with a claim, if they believe the company owes them money. They have the right to object to the company’s striking off, and force it to remain on the register until their claim has been met, if it is found to be legitimate.
Failing to inform all interested parties could result in reinstatement of the limited company at a later date, and potential personal liability for the directors.
Real Business Rescue will advise on the necessary steps to close down your business, and make sure you have covered all the required aspects.
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