How to close or dissolve a company?
Posted on 11th May 2021 at 10:07
A company can be closed by having its name removed from the Companies House Register if the following conditions are met:
No name-change in the last three months.
Does not have a CVA (Company Voluntary Arrangement) etc. with creditors.
If any of the conditions are not fulfilled the company must be voluntarily liquidated instead.
Before closing the company, certain responsibilities need to be fulfilled and it must be legally closed in the following manner:
All accounts and assets must be dealt with.
The HMRC and all involved parties must be notified in advance.
The employees must be dealt with as per government guidelines.
The stakeholders to be informed:
After the application to strike off is completed a copy of it must be sent to all affected and interested parties including:
All employees of the company.
All involved stakeholders (shareholders)
Directors that have not signed off the closure application.
Trustees or those managing the employee pension fund.
If the company has staff on its payroll the redundancy rules must be followed for them with the final salary or any wages due cleared to them.
PAYE and National Insurance (NI): The HMRC must be informed that the company is no longer an employer.
Business assets: Any remaining business assets must be sold off and the funds distributed amongst the shareholders before the company name is removed from the register. If anything is remaining it will transfer to the government.
Final accounts: The Company Tax Return and final statutory accounts must be sent to the HMRC.
Capital Gains Tax: If you have received Capital gains tax on personal profits from assets before the company name is struck off, tax needs to be paid on that amount. Tax relief (if any) will be available from Entrepreneurs’ Relief.
For 7 years all business-related documents need to be stored safely. If there were employees their liability insurance policy and schedule has to be kept for 40 years from the day the company was closed.
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