You must inform HMRC that your company is no longer acting so as not to issue further corporate tax reminders. How you do this depends on whether HMRC has already asked your business to submit (i.e., file) a business income tax return. To do this, you must appoint a licensed insolvency administrator. You will “liquidate” all the assets of the company and use the proceeds to repay your creditors in turn. However, it is important that you get professional insolvency advice on the best closing procedure for your business, as there are significant risks in choosing the wrong method. Closing a limited liability company isn`t always easy, and there are a few other things you need to keep in mind: Companies House will eventually cancel a company that doesn`t have a director, but it can make it harder to manage the company`s assets. If you think you want to trade through your limited liability company in the future, you always have the option to put it on hold. An accountant cannot close your business using these methods, but they can provide invaluable support and advice on important topics such as HMRC`s strict requirements, tax efficiency and the preparation of the company`s final financial statements. A limited liability company is considered dormant if it does not carry out any business activity or has not earned income for a certain period of time. The most appropriate method of closing your business depends on the complexity of your company`s business and its financial situation.
Closing a solvent limited liability company that has relatively simple business issues can be done through a process called voluntary dissolution. Your corporation must meet the following requirements to begin the dissolution process and submit Form DS01: For example, directors of limited liability companies who wish to retire or whose corporations are no longer tax-efficient may choose MVL. This method is sometimes considered more cumbersome, but many administrators feel that it is offset by the tax-saving benefits available. Yes. All company records must be kept for seven years. This is the case, of course, whether you close or stay open. It`s just a standard business requirement. If this is the case, you can simply request to formally remove it at Companies House by submitting Form DS01, but it is very important that you follow company law to do so.
Any profits you want to distribute from your graduate company must be distributed fairly to their shareholders – you need to think about the most tax-efficient way to distribute them. We have more information about the deletion process in our article on “Tax Implications of Closing a Limited Liability Company”. Once the process is complete, the company is removed from the companies House register and officially ceases to exist. Sometimes, when a creditor has successfully filed an application for liquidation, the court orders the liquidation of a business – this is called a forced liquidation. When this situation occurs, you should keep your dedicated accountant informed of the outcome of your meeting. If you do not inform HMRC that you have stopped trading, reminders may still be sent to you to pay your company`s corporate income tax. Begbies Traynor is available for an appointment as liquidator if necessary and ensures that you meet all the legal requirements of closing a company in the UK. We have extensive experience in helping business leaders navigate this somewhat demanding process and provide you with the reliable advice you need. If you kept the notification we sent you when you assigned your EIN, you must attach a copy to your EIN withdrawal letter.
Send us both documents to: Since HMRC inevitably has to be involved, it`s not as easy as closing and leaving your bank account. A good accountant (including an online accountant) can help you find your way through the final area. At My Accountant Friend, we currently charge £500 + VAT to complete the closing process and include the closure of VAT PAYE and all other items associated with the closure of the business in these fees. When you close your solvent limited liability company, you have several options. Once the company was fully dissolved, which takes about three months from the filing of Form DS01 (assuming there are no objections from creditors), the company would no longer exist, so HMRC would not be able to sue the company. That means they can try! Theoretically, they could also take action against directors if they believe illegal acts such as fraud have taken place. Therefore, there is no real timetable for this. If any of these situations apply to you, the first step in closing your limited liability company is to stop trading altogether in order to stop making sales and incur costs. If your business has already filed a business tax return or received a “notice of delivery of a business tax return”, you will still need to file a business tax return online – this will show HMRC that your business is inactive. HMRC`s instructions can be found on the Gov.uk website. If a creditor has obtained a judgment from the district court against you, this can prove the insolvency of the company.
If you do not act in the best interests of creditors when liquidating your company`s assets, you may be personally liable for debts. If your business has never received a “Notice of Delivery of a Business Income Tax Return”, you can notify HMRC by phone (0300 200 3410) or by mail (Corporate Income and Customs Services, HM Revenue and Customs, BX9 1AX, United Kingdom) that it is inactive. Dissolution is appropriate if you have decided that you are no longer interested in trading through your limited liability company or if you have opened it up to a specific set of objectives that have now been fulfilled. If you do not intend to trade through this company and there is a surplus of cash, it is often easier to leave. If you`ve decided that closing your business is the right thing to do, read on to find out how to close your limited liability company, what options you have, and what important things to think about when you do. Your business still has to pay corporate tax and file a tax return, even if there is no director. If you`ve gone from a limited liability company to a sole proprietor, the good times come back and you decide to start over, it could leave you out of your own pocket. For more information, check out our guide to the company`s rest period.
You must appoint a new director if your company does not have one, for example, if only one director has died. If the company is solvent, it is. As above, when we talk about a business with less than £25,000 in cash, the closing accounts are prepared and we submit them to Companies House with a DS01 form (they charge £8 for this) to begin the dissolution process. Tax efficiency is not an issue with a CVL because there are no excess funds for distribution. The company name is permanently removed from the Companies House register and the company no longer exists. If you are registered for VAT, you will need to complete a VAT 7 form to inform HMRC of your decision to deregister your business. When your company is founded, you must dissolve it through the office of your Secretary of State. Each state differs slightly in its requirements, but you usually need to fill out a form, provide information about your creditors, confirm that shareholders voted to close the company, and pay a filing fee.
But what if you want to close your business for some reason? Can an accountant close your business or does the closing process have to be done by a licensed insolvency administrator? Before proceeding, 75% of shareholders must approve a CVL.