Considering whether to close a limited company or make it dormant is a big decision, so it\u2019s important to explore all options before committing to a course of action. We explore the options below.<\/p>\n
Perhaps your company has stopped trading, you\u2019re thinking of taking a career break or retiring, or you\u2019ve decided to accept a permanent job offer and move back to employment. The choice between dissolving your company or making it dormant requires careful consideration.<\/p>\n
If you are certain that you want to permanently stop trading and close your limited company<\/a>, you must first determine whether the business is solvent or insolvent.<\/p>\n If your company is solvent (i.e., it can pay its debts), you can close the company in one of two ways:<\/p>\n If your company is insolvent (i.e., it is unable to pay its debts), you will have to liquidate the company by arranging a creditors\u2019 voluntary liquidation or a compulsory liquidation.<\/p>\n Under each arrangement, a liquidator will be appointed to take control of the company, oversee the winding up process, and use your company\u2019s assets to pay off any debts that it owes.<\/p>\n This is the easiest and most cost-effective way to close a limited company. To be eligible to have your company struck off the register<\/a>, the business must not:<\/p>\n To strike off your company, you must file form DS01<\/a> at Companies House and pay a fee of \u00a333. Before doing this, you will need to:<\/p>\n When you have submitted Companies House form DS01, your striking off request will be published in The Gazette. If no one objects within 2 months of publication of the notice, your company will be struck off the register. A subsequent notice will be published to confirm that the company has been dissolved.<\/p>\n If you cannot satisfy all of the the conditions required to strike off your company, you will need to initiate a members\u2019 voluntarily liquidation<\/a> instead. This alternate procedure is available if your limited company is solvent and:<\/p>\n To close a limited company by members\u2019 voluntary liquidation, you must:<\/p>\n The Declaration of Solvency (or the Scottish equivalent) is a written statement confirming that the company directors have assessed the business and are confident that it is able to pay its debts. It should also include the following details:<\/p>\n When the written statement has been completed, the following steps must be taken:<\/p>\n Once the liquidator has been appointed, the directors will no longer have control of the company or any of its assets. The liquidator will deal with all administrative matters involved in the closure of the business.<\/p>\n If your company is insolvent and you have made the decision to close it, the interests of creditors will take precedence during the liquidation process. You can either arrange a creditors\u2019 voluntary liquidation or you can apply for compulsory liquidation.<\/p>\n To arrange a creditors\u2019s voluntary liquidation<\/a>, you will need to call a general meeting of the shareholders and propose a special resolution of the members approving the winding up of the company. If the resolution is passed, you must:<\/p>\n Alternatively, if you are a director, you can apply directly to the court requesting compulsory liquidation<\/a> of the company.<\/p>\n You must demonstrate to the court that the company is unable to satisfy outstanding debts of \u00a3750 or more and that 75% of shareholders\u2019 votes approve compulsory liquidation.<\/p>\n A dormant company<\/a> is one which is currently inactive with \u201cno significant accounting transactions\u201d during its financial year, but it remains on the register at Companies House and can start trading again at any time.<\/p>\n Making your company dormant is the better option if you simply wish to take a break from running the business for a fixed or indeterminate period of time; if you want to test the waters with retirement or a new job; or if you have any doubts whatsoever about closing your company and having it struck off the register.<\/p>\n Dormant Company Accounts Service - \u00a349.99<\/span><\/a>\n \n There are a number of advantages to making a company dormant rather than having it struck off the register:<\/p>\n To make your company dormant, you must notify HMRC as soon as possible. You may have to deliver a Company Tax Return and annual accounts to HMRC for the period of activity prior to becoming dormant.<\/p>\n There is no need to inform Companies House about your company\u2019s change of trading status, but you will have to file a Confirmation Statement<\/a> and prepare dormant company accounts<\/a> every year.<\/p>\n"},"excerpt":{"rendered":" Considering whether to close a limited company or make it dormant is a big decision, so it\u2019s important to explore all options before committing to a course of action. We explore the options below. Perhaps your company has stopped trading, you\u2019re thinking of taking a career break or retiring, or you\u2019ve decided to accept a…<\/p>\n","protected":false},"author":10,"featured_media":7507,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[114],"tags":[],"class_list":["post-7508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-advice","category-114","description-off"],"acf":[],"yoast_head":"\n\n
1. Apply to have your company stuck off the register<\/h4>\n
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2. Start a members\u2019 voluntary liquidation<\/h4>\n
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3. Liquidate an insolvent company<\/h4>\n
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Making a company dormant<\/h3>\n
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