Many people set up a limited company with very high hopes of business success. Unfortunately such success is not guaranteed and can elude some, resulting in the need to close the company.
If your company is no longer needed, has no debts and has stopped trading then closing the business should be easy and straight forward.
In these circumstances the closure of the company can be undertaken by following the “voluntary strike off and dissolution process” as defined on the Companies House web site – click here for more details.
Before you start the close down process
Certain conditions must have been fulfilled prior to the application to close down the company being made. Of importance are:
- The company must not have traded in the last 3 months nor changed its name
- You must have informed HMRC – they will expect final accounts to close of trade and for any taxes to have been settled.
- You’ll also need to account for any surplus funds that you intend to extract from the company by way of salary, dividend or capital distribution. If you’re uncertain about this then you may need to seek the services of an accountant to help you through this process and ensure that you’ve extracted the funds correctly and in the most tax efficient way (find out more – click here)
- 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
Complete the form
The application to close or strike off the company must be made by the directors by completing a form called a DS01. The form is easy to complete and quite self explanatory in its content.
A paper version of the form can be downloaded from the GOV.uk web site – click here
The fee payable for this is £10.
Do it online – it’s cheaper
You can complete the form online – click here
The filing fee for doing it online is just £8 and it’s easier to do.
Don’t lose your money
Do make sure that you close your business bank accounts prior to the company being struck off as the bank accounts will be frozen and any monies in the account will pass to the Crown if you’ve not withdrawn them before the close down is finalised.
The strike off process does take about two months from the date of application. The timeframe is set by Companies House and there are a number of steps that they undertake before the eventual close down will be effective. Companies House will:
- register the application for strike off on the company’s public record
- send an acknowledgement to you to this effect as well as a notification to the company at its registered office address
- publish notice of the proposed striking off in the Gazette in order that any interested parties can object if needed e.g. HMRC if you have not filed accounts and tax returns or they know tax is due
More complicated Close Downs
If you’ve surplus funds in the company you may wish to consider extracting these by way of a capital distribution or even consider a Members Voluntary Liquidation (click here to find out more about these).
If you’re going down this route then getting an accountant on board in your pre exit planning would be a worthwhile thing to do – click here